Heckled and catcalled throughout his hour-long Budget announcement, the Chancellor George Osborne called this year’s budget “A budget for building a resilient economy.
Overall, the budget was good news for taxpayers, with the price of beer going down by 1p and the price of whiskey and cider being frozen. Bingo players also benefited, with a reduction in bingo duty to 10 percent. A new one pound coin was also announced, in an attempt to cut out counterfeit coins.
So what of contractors?
Pension – Tax restrictions on access to pension pots have been removed. – There has also been an increase in total pension savings people can take as a lump sum to £30,000. – Contractors will be able to access their money that’s held in small pension pots from previous employers
Taxation – The personal tax allowance will rise to £10,500 from next April – Fuel duty has been frozen – ISAs have been overhauled, with the limited now raised to £15,000 per year – The previously announced (but confirmed today) – £2,000 employers National Insurance exemption
Others – The Help to Buy scheme has been extended to 2020 – The UK exporting industry will receive more backing. Overseas clients could be more attracted to UK contractors in the coming months and years. – Premium bonds are increasing to £40,000 in June 2014 and £50,000 the following year – The transferable personal allowance between spouses has gone up to £1,050
What of recruiters?
(Don’t worry, we haven’t left you out!) False Self Employment Legislation With the ‘False self-employment’ legislation being confirmed and due to come into force on 6th April 2014, the impact on recruitment agencies making payment through intermediaries will be any intermediary found to be making payments to a worker on a self-employed basis and it is found the worker is not truly self-employed, HMRC will then look to transfer tax liability to the agency. In the new legislation, there are four areas that recruiters need to be made aware of –
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- The definition of control, direction and supervision must be clarified by certain employment intermediaries. HMRC have written a guide on this.
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- TAAR will be introduced (Targeted Anti Avoidance Rule) in order to deter avoidance where an employment intermediary incorporates all of its workers with the sole purpose of avoiding new legislation and avoiding tax.
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- The definition of ‘intermediary’ is still not clear until the 2014 Finance Bill is published on 27thMarch 2014.
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- Personal Service Companies are out of the scope of this new legislation.
If you’d like to receive more information on this subject, or if you have any questions on the above, please contact us on 01707 871645 or agency@churchill-knight.co.uk
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