The Spring Budget was announced earlier this month, where Chancellor Hammond advised that we were preparing for a European exit by 'building a stronger, fairer, more global Britain'. He confirmed that the Corporation Tax rate continues to be reduced to meet his Government's target of bringing it down to 17% by 2020. For individual taxpayers the Personal Tax Allowance for the coming year has already been set at £11,500 with the basic rate of 20% being charged on the first £35,500 of income over the tax free allowance. For more information on the Spring Budget please head to our website.
IR35 is continuing to make headlines. Under the new IR35 public sector rules, where a PSC contractor works within the scope of IR35, the public authority, agency or third party paying the PSC ("fee payer") will be responsible for deducting tax and Primary National Insurance Contributions (NICs) from the payments it makes to the PSC. It must also calculate and pay employer's NICs and the Apprenticeship Levy. This unpopular proposals set to go ahead on the 6th April, and we have been supporting any of our contractors who are affected by these changes.
In this month's newsletter we also take a look at uncompliant umbrella schemes and what this ultimately means for contractors who choose to operate through them as well as the rates and thresholds for the new 2017/18 tax year.