"An unashamedly pro-business budget" was how the Financial Times described the Chancellor's budget today and we cannot disagree with that.
For contractors in business there were some positives:
- Personal tax allowances will rise by £1100 to £9205 from April 2013 making an estimated 24 million people £220/year better off.
- A promised investment in roads and infrastructure will be welcomed by those travelling across the country to temporary sites.
- Investment into several key sectors including Oil and Gas and Aerospace together with reductions to corporation tax
Of course it was not all good news. There is the almost mandatory increase in tax on alchohol, cigarettes and fuel. Also from April 2013, the threshold for paying higher rate tax reduces to £41,450 from its current level of £42,475 and the tax charge to recover Child Benefit from families where an individual has income over £50,000 pa will be put in place from January next year.
The Chancellor also made it clear that those seeking to avoid tax would be targeted. Whilst specifically he mentioned stamp duty saving schemes we would expect further statements from the Treasury or HMRC on offshore schemes designed to save contractors tax. From our conversations with HMRC there is a real will to put an end to such schemes which we fully support.
Finally the Chancellor announced that a new simpler IR35 regime will be introduced. Whilst the simplification of any tax rules is to be welcomed the devil will be in the detail. Fortunately for our contractors we have a dedicated team able to advise on IR35 in its current form or as amended.
You can view the complete 2012 budget here