Autumn Budget Predictions for Contractors

The autumn statement will be new chancellor Rachel Reeves’ first opportunity to set out the Labour government’s economic plans for the country, and the budget will have an impact across every UK sector, business and employee.

In this article we’re going to take a closer look at what contractors should be looking out for in the 2024 autumn budget.

IR35 reform

IR35 (also known as the Off-payroll Working rules) has been an issue for the freelance community for some time, and recent research found that almost a quarter of contractors intend to seek work overseas to escape the legislation.

Labour are expected to initially launch a consultation on IR35, as outlined in the party’s pre-election Plan to Make Work Pay policy document, but keep an eye out for announcements regarding these rules this autumn.

Increased support for small business and startups

The Labour Party has spoken a lot about being pro-business, so we might see some additional support for small businesses and startups in the autumn statement. If you’re a contractor but you’ve set yourself up as a limited company, any changes to tax rates or tax relief will impact you.

Support for training and upskilling

Contractors shouldn’t necessarily expect to see increased support for training and upskilling, but measures such as tax incentives for training expenditures and funding for professional development programmes is something the Freelancer & Contractor Services Association (FCSA) has been advocating for. The association would also like the Skills & Apprenticeship Levy to be better targeted.

Increase in corporation tax

If you operate as a contractor through a Personal Service Company (a limited company formed to provide the services of a single contractor, consultant or freelancer) then you’ll be keeping an eye on the Corporation Tax rate.

Currently, the UK Corporation Tax rate is 19% if you have profits under £50,000, although it can be as high as 25% if your business is making profits over £250,000.

Back in February, then Shadow Chancellor Rachel Reeves promised that Labour would not raise Corporation Tax if elected, but that they could cut it to boost ‘competitiveness’. However, since coming to office the new government has claimed the economy is worse than expected, potentially paving the way for tax increases in the autumn.

How we can help

At Warr & Co we have decades of combined experience in providing first-class accounting services to small businesses and sole traders. From ensuring you fulfil your tax obligations and claim as much relief that is available to you, to company formation and VAT registration, we can ensure you’re prepared for any tax or legislative changes that could be announced this autumn and beyond.

To find out more about how we can help, why not book a free, no obligation consultation? Alternatively, you can simply send us a message and one of our team will be in touch with you as soon as possible.