The Autumn Statement back in December proved a bit of a washout for freelancers, with George Osborne content to coquettishly promise help for the self-employed in the future, but delivering essentially nothing concrete in the short term.
So, with the 2013 Budget approaching, we’re interested to see if Osborne can deliver the goods this time around. The FSB has called for this Budget to be “unashamedly focussed on boosting small business,” however many financial experts have concluded that Osborne has scant wiggle-room.
So what are we expecting?
Business Bank clarification
Vince Cable has been talking about his Business Bank proposal for almost a year now, without actually divulging many details. We know it’ll have £1 billion in public cash to play with, and Cable hopes to secure a private investment of a similar amount. With private finance on board, the whole endeavour may be scuppered before even leaving port – with pressure to return a profit from its commercial investors the Business Bank may become just as risk-averse as its High Street peers. We hope to see some clarification when Osborne takes the stage.
Amongst the more ludicrous of Osborne’s proposals is the controversial Shares-for-rights scheme, which would allow small businesses to offer employees shares in exchange for waiving some employment rights (Redundancy pay and Unfair Dismissal claims, for example) in an effort to reduce red tape for SMEs. This proposal was name-checked at the Autumn Statement, so further details are quite possibly on the cards.
Personal Allowance increase
The Coalition has been very public about its aim to increase the Personal Allowance – the amount an individual can earn in a year before paying Income Tax – to £10,000. With the Allowance jumping to £9,440 from £8,105 on April 6th (the biggest increase in history, we’re told) the Treasury is now within spitting distance of making the £10,000 tax-free allowance a reality. If we were to put money on an announcement, it’d be this one.
Highly unlikely it’ll warrant a mention in the Budget speech itself, but buried deep within the Budget document may be clarification on treatment of “controlling persons” (individuals working through their own limited companies yet apparently holding high office in larger organisations) for IR35 purposes. You may remember legislation was introduced in the Finance Bill 2013 to hastily address the rampant abuse of limited company status in the public sector (a scandal we affectionately call LesterGate). These changes muddied the IR35 waters further, so clarification on how the new rules will be enforced could be on the way.
National Insurance / PAYE changes
Another long-term project the Government has been touting is a merger of NICs and PAYE Income tax, in order to simplify the UK’s personal tax landscape. We could well hear more about these changes, including the possibility of a hiking of NICs for the self-employed to bring them in line with full-time employees. This could spell bad news for the sole traders out there, so keep an eye on this one.
We’ll be providing up-to-the-minute coverage of the 2013 Budget next Wednesday, so be sure to follow along on Twitter for all the changes freelancers need to know about.