Autumn Statement 2013 Highlights

Chancellor George Osborne delivered his Autumn Statement on Thursday, with many of the key points having been leaked before the speech. The key points that affect contractors, freelancers and small businesses are outlined below:

Help with Business Rates

Various measures were announced to help bring small retailers back to the high street, these include:

  • 2% cap on business rate raises instead of being linked to inflation

  • The small business rates relief has been extended to April 2015

  • A £1,000 discount on retail premises with a rateable value of less than £50,000 for the next two years.

  • A 50% discount on rates for 18 months for any businesses moving into long-term empty retail premises.

Under 21's Employer NI scraped

From April 2015 businesses will no longer have to pay employers NI for the majority of staff under the age of 21. This exemption only applies to staff earnings under £813 per week (£42,285).

Married Couples Tax Break

Married couples & civil partners will be able to transfer £1,000 of their income tax allowance to their partners from April 2015.

Rising Travel Prices

To tackle rising travel prices the chancellor announced that next years proposed fuel duty rise, of 2p per litre, will be scrapped.

Train fares will now rise in line with inflation instead of 1% above the RPI as was previously planned.

Additional Business Funding

An additional £250 million is being made available to the British Business Bank.

A further £160 million will be added to the startup loans scheme.

Changes to the State Pension

The state pension age will increase to 68 in the 2030’s & then by an additional year in the last 2040’s.

The state pension will rise by £2.95 a week.

Capital Gains Tax for Non-Residents

From April 2015 non-residents who sell residential property in the UK will be liable to the same Capital Gains Tax on gains that currently applies to Ordinary residents.

Anti Avoidance - IR35 update?

Further anti-avoidance rules were mentioned but there was one quote that set many contractor accountants alarm bells ringing, “We’re going to tackle the growth of intermediaries disguising employment as false self employment, depriving workforces of basic employment rights like the minimum wage in a bid to avoid employer national insurance.”.

Our initial thoughts were that this would affect the current IR35 rules however upon closer inspections and clarification from HMRC it appears this will not have any direct impact on the IR35 rules nor genuine contractors operating through their own limited company.

Instead this refers to mass-marketed schemes where workers were moved en-masse into self-employment, even though they should be employees and will be achieved by changing the Agencies legislation, not IR35.

Summary

This was a mainly positive statement for small businesses albeit without any ground breaking positive announcements. As always it did come with a sting in the tail, this time in the form of the brief mention of targeting artificial intermediaries.

As is so often the case there is likely to be further clarification once the detailed guidance has been interpreted and we will keep you up to date with future developments.

Tags: News, PAYE, IR35

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