Rishi Sunak cancels Autumn Budget 2020 due to coronavirus crisis

Rishi Sunak unsurprisingly cancelled Autumn Budget 2020 late yesterday, saying the public wants the government to focus on “the here and now” -- code for the coronavirus resurgence.

The chancellor did take to Twitter early yesterday, seeming to hint at no cancellation because further government support schemes, including a mooted ‘furlough 2.0,’ need unveiling.

“As our response to coronavirus adapts,” tweeted Mr Sunak, “tomorrow afternoon I will update the House of Commons on our plans to continue protecting jobs through the winter.”

'Now isn't the right time'

But after his online post, an HM Treasury statement was issued, saying: “As we heard this week, now is not the right time to outline long-term plans.

“People want to see us focused on the here and now. So we are confirming today that there will be no Budget this autumn.”

Seb Maley, chief executive of Qdos, says he is among those who want the focus to be on independent workers, contractors and enterprising-types who have gone it alone.

“For how much longer can the government ignore the needs of millions of freelancers, contractors and self-employed people?” he asked, implying a Budget cancellation puts potential government support measures further out of reach.

'No end in sight'

“Some individuals haven’t received any financial support for six months now -- others have been allowed to fall between the cracks, finding themselves eligible for very little.”

He added of Mr Sunak’s statement later today (Thursday): “Given there’s no end in sight to this crisis, the chancellor must step up and protect one of the UK’s most important economic assets -- the independent workforce.”

Kate Cottrell, co-founder of Bauer & Cottrell, isn’t at all surprised by the Budget ‘delay’ – although she noted that a replacement date has not been announced.

“What with Covid looming large and Brexit deals not done, a cancellation of the Autumn Budget is hardly surprising,” she said.

“I think most contractors would have been outraged to be faced with any Budgetary tax increases…especially with the new IR35 private sector rules already due to come in.” 

'Devastation'

A former tax inspector, Cottrell added: “Until HMT and HMRC see the devastation caused from redundancies after the covid support packages deplete, how can they possibly make any sense of the state of the economy?”

Carolyn Walsh, who also used to work for the Revenue, suggested that delaying what was likely to be more potential pain for PSCs, as opposed to props to support them, is almost the status quo.

“We could still see a very early Spring Budget in 2021, so [the cancellation of the November Budget] doesn’t mean much,” said Walsh, the managing director at Andraste Accounting.

“But a delay to the off-payroll working rules on the one hand, or an increase in dividends tax on the other, or even higher NI for the self-employed, would hurt significantly next year.”

'Not surprising'

“It’s not surprising that the Autumn Budget has been cancelled this year,” Julia Kermode, the former CEO of the Freelancer & Contractor Services Association posted online last night.

“[Fortunately] tomorrow afternoon, the chancellor will give an update on government plans to continue protecting jobs through the winter.”

Vantage Accounting agrees, saying yesterday that contractors and other businesses ought to “expect some announcements tomorrow on coronavirus support.”

Forgotten Ltd, a lobby group for limited companies, is similarly hopeful that Mr Sunak’s ‘Winter Economic Recovery Plan’ will contain some of its recommendations to support tiny incorporated businesses through the pandemic.

'Leaves contractors in the dark'

But many others are downbeat. One tax adviser who declined to be named said last night -- on the first day of autumn, and on the eve of new covid-19 restrictions applying in England:

“[This cancellation of Autumn Budget 2020] leaves contractors in the dark, literally, for another six months. And at the worst possible time.”

“I can't see them helping us directors of small limited companies,” echoed a despondent PSC in the engineering sector. “Then there's the new IR35 regs to prepare for in April. The combined effects will be catastrophic.”