The Autumn Budget 2017 sent a mixed message to contractors. Here are the key announcements affecting contractors from the Autumn Budget.

Consultation announced into IR35 in the private sector

The biggest news to come out of the Autumn Budget for contractors was the highly anticipated consultation into IR35 in the private sector. Despite the chaos caused by the public sector reforms, the Chancellor insists that compliance has increased as a result.

The consultation will consider an extension of the rules into the private sector and will be published next year. With the livelihood of thousands of contingent workers under threat, contractors are advised to waste no time making their voices heard.

VAT threshold to remain the same

Better news for the contracting sector came in the form of confirmation that the £85,000 VAT registration threshold will remain the same for the next two years from April 2018. The decision comes in response to a report by the Office of Tax Simplification, calling for a reduction to the threshold.

It seems the Chancellor has heeded warnings from the likes of IPSE, who claimed a reduction would create serious cash flow problems for many contractors.

Tax avoidance measures shift focus away from contractors

Staying true to form, the Chancellor announced a raft of measures targeting tax avoidance and evasion. This includes measures intended to stifle attempts by some employers to avoid their NICs obligations, as well as measures to prevent disguised remuneration avoidance schemes.

Public investment could create contractor opportunities

A £44bn investment in the UK housing market could lead to opportunities for construction contractors. In his speech, the Chancellor noted that the fund aims to aid the development of 300,000 additional homes over each of the next five years. This looks likely to invigorate an industry which has stagnated of late.

The NHS will also benefit from an additional £6.3bn in funding, with £2.8bn ring-fenced for resource funding. How much trusts allocate to hiring locum staff is obviously not yet known. But this boost could in-turn benefit locums working for NHS trusts struggling to manage following the public sector IR35 reforms.

Other announcements from the Autumn Budget 2017

Here is a quick round-up of the other Budget measures which impinge on contractors.

• The personal allowance is set to rise to £11,850 from April 2018
• The higher rate tax threshold will also rise to £46,350 from April 2018
• Business rate relief – the planned switch from RPI to CPI will happen in April 2018
• Government will delay implementing NICs policy changes by one year
• The lifetime allowance for pension savings will increase to £1,030,000 from 2018
• Stamp Duty will be abolished for first time buyers on homes worth up to £300,000

Kind regards