Emergency budget update and how it affects contractors

Tuesday 22nd June, 2010
Industry news

The Chancellor has positioned Tuesday's budget as a five-year plan to rebuild the British economy based on the Government's values of responsibility, freedom and fairness.

It is certainly a budget that shows the Government's commitment to small businesses with good news in relation to Corporation Tax rates and NI thresholds which will be a relief to a lot of freelancers.

Even the bad news of an increase in the VAT is tempered by the changes in flat rates for small business. Whilst we often worry about the devil being in the detail there is an awful lot of detail in this budget, you can view a full review of the changes here, and how it will affect you, alternatively see below for a quick round up of the key points.

In summary

This is probably as good a budget as small business and freelancers could have hoped for.

The negatives are:

  • VAT increase will increase the burden on consumers and potentially restrict growth
  • The rise in Employer's NI has been retained, albeit with an increased threshold to reduce the overall burden.

The positives are:

  • Corporation rates are to be reduced
  • Income tax remains unchanged

Further details will emerge over the next few weeks and we will update the site as and when anything likely to impact our customers arises.