Quiet Spring Statement incoming, contractors' advisers say

A low-key Spring Statement 2019 that neither distracts from Brexit nor derails IR35 changes for the private sector is what to expect of Philip Hammond, advisers have told ContractorUK.

Bolder moves by the chancellor on Wednesday, such as a £13billion corporation tax cut by cutting the rate to 17% from April, have been recommend to him under a ‘no-deal’ Brexit.

But to incentivise MPs towards the opposite -- voting for the prime minister’s deal with the EU, Mr Hammond will dangle in front of them £15bn worth of tax cuts and spending increases.

'Crashes out'

An even bigger boost, such as the Centre for Policy Studies’ 17% rate idea combined with an uncapped Annual Investment Allowance to protect a UK that ‘crashes out,’ cannot be ruled out either.

Advisers to contractors sound broadly in favour of the chancellor using the statement to outline which UK withdrawal scenario warrants which financial-support package.

“When your house is burning, you focus on the fire and saving the house not worrying about what’s inside even if there are valuables,” says accountancy firm DNS Accountants.

'Leave contractors alone'

Managing director Sumit Agarwal explained: “So I hope Mr Hammond deals just with Brexit and the much bigger fiscal risks [than those he claims contracting poses].

“Given the grave situation…[facing our] economy and businesses, it would be best if the chancellor leaves contractors and IR35 alone, and focuses on Brexit and supporting firms.”

Christian Faires, managing director of Intouch Accounting, believes that there is a good chance of this happening, mainly as Brexit is pressing and consulting on IR35 is underway.  

He said: “With Brexit being the overriding focus, the Spring Statement will be light on major tax changes… [and anyway], more detail on private sector IR35 reform was shared [already]”.

'Stability'

The Recruitment & Employment Confederation sounds more demanding, as last week it said its members, which place IT contractors, have many things they hope the chancellor ticks-off.

“[Our] members are looking to the…Spring Statement to inject stability and long-term thinking into our economic debate.

“A commitment to proper flexibility in the skills levy, [and] an open but controlled approach to immigration after Brexit… are top of recruiters’ agenda.”

But at odds with the hope of no new announcements on IR35, the REC says that, despite last week’s consultation, it wants to see ‘changes to plans on contractor tax to protect compliant businesses.’