The Secret Accountant: the 2018 Budget and all that
Theresa May told the Tory party conference that people deserve a break from the long spell of austerity and claimed this would soon be coming to an end.
The PM's bold words have, of course, put pressure on the chancellor to ensure that his (third) Budget on Monday reflects this ... and brings hope for the future.
The Budget affects everyone in the UK and often beyond, from individuals to large corporations. With Brexit on the horizon, this makes Philip Hammond's next statement more relevant than ever.
This is the final budget before the UK leaves the EU and, with a lot of uncertainty surrounding Brexit and how the economy is prepared to deal with this, the government’s exit plan will be a significant and closely watched part of the speech.
Enterprise Management Incentive
One specific area likely to be affected by Brexit is Enterprise Management Incentive (EMI) schemes. EMIs are approved by EU state aid rules, and it is uncertain whether these will be re-approved following the UK’s exit from the EU.
Fuel duty is an area that hits many of us and, although it was speculated that this would go up for the first time in nearly a decade, the PM has confirmed that this will remain frozen for the ninth year in a row, which is positive news for motorists.
Another positive for business-minded individuals is that the government is encouraging entrepreneurs by committing to a significant investment in Research and Development (R&D) funding, with over £4.7bn planned to be invested over the next four years.
IR35 legislation
Another area the Budget may affect is the ‘contractor’ sector with potential further changes to IR35 legislation, with the recent reform and views of this within the public sector also now moving into the private sector.
Those individuals using a PSC (Private Service Company) to trade through, are generally viewed to be operating in this way to avoid National Insurance contributions and other tax, therefore a stricter look at a company’s IR35 status will be extended to those in the private sector as well as public.
An impact of this move could be more individuals moving to full-time employment rather than trading through a company, where they will likely pay similar amounts of tax anyway resulting in a minimal gain from this legislation.
Following the Budget release on Monday, I will revisit the key topics and what the results actually mean for each of us.
