Chancellor George Osborne released his Budget 2015 last week, promising to continue building a national economy that's "growing, creating jobs and paying its way"; but what do the changes mean for contractors? A recent article on Contractor Calculator looked at this in more detail.
During his speech, Osborne focused on improving Britain's economic prospects through work and employment, stating: "This Budget does more to back business and make work pay, so we create full employment it backs the self-employed, the small business-owner and the homebuyer."
He also declared that there will be a much tougher stance on tax avoidance, with the authorities "clamping down on agencies and umbrella companies who have abused tax reliefs for expenses."
Some other key takeaways that will affect contractors include the following: The personal allowance will increase to £11,000 by the year 2016/17, with the higher rate rising to £43,000. Better still, there will be no corresponding rise to the threshold for NI contributions.
A new personal savings allowance means that the first £1,000 of savings will not be subject to tax. Online tax accounts will now be used in place of Self-Assessment tax returns, which will be scrapped.
Anti-avoidance measures will be targeted to umbrella companies and agency payroll expenses. Savers will benefit from a more flexible ISA, allowing them to access and replace funds without being penalised. A new Help to Buy ISA will reward savers with £50 for every £200 that they save.
Tax measures aimed at boosting production and exploration operations in the North Sea will benefit oil and gas contractors. Further investment in infrastructure will also be advantageous for contractors, particularly in the North and South West regions.IT contractors and freelancers in the creative industry stand to benefit from TV, film and gaming tax credits.