Post-Budget Analysis for Freelancers

In case you missed George Osbourne’s Emergency Budget here are the highlights from yesterday’s speech in Westminster.

The highlights that will affect freelancers include:

• Income tax personal allowance to be increased by £1000
• Public sector pay will be frozen for 2 years for people on less then £21,000
• High rate income tax threshold to remain frozen to 2013
• Capital Gains Tax up to 28% people on the upper rate of taxation, but entrepreneurs relief to £5m for lifetime at 10%
• Small companies corporation tax to be reduced to 20%
• 5 year plan to reform the corporation tax regime

Changes that will affect everyone include:

• VAT increased to 20% from Jan 2011
• Basic state pension to be re-linked with earnings

And finally, in the Budget document itself, “The Government remains committed to a review of IR35 and small business tax and will release further details shortly.”

Osbourne also said there was a commitment to setting up the “Office of Tax Simplification” — perhaps they’ll be the ones to do away with IR35?

See www.hmtreasury.gov.uk for the full report

Tough but fair?

So far the community seems to think the Budget was a good one. The PCG have been polling their membership and 88% of freelancers who responded agreed with the statment “this emergency budget was tough but fair”.

Do you agree with the Chancellor George Osborne when he said this emergency budget was tough but fair?

Cast your vote via the PCG site Freelancer views – Vote Now.

An intelligent budget which gives freelancers hope for a fairer time ahead – says PCG

PCG today welcomed the first Budget of the Coalition Government. “We were also delighted that the Chancellor George Osborne declared ‘Britain is open for business’” they said.

Anne Redston, Visiting Professor of Taxation at King’s College London, told PCG:

“This budget has left freelancers and contractors relatively unscathed on the tax front. The promise of a small business review has been firmed up, and the Office of Tax Simplification is long overdue. In this budget the Government has set out the big picture; now they can start colouring in the details.”

Read more on the PCG site.

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