Chancellor Rachel Reeves sets Autumn Budget 2024 for October 30th

Chancellor Rachel Reeves says Autumn Budget 2024 - with potential ramifications for IT contractors - will be held on October 30th 2024.

It will be the first Budget from a Labour chancellor since Alistair Darling in 2010, when he moved to target contractor tax schemes.

Reeves has overseen a dramatic change in mood music in the last few days, laying the ground for tax rises by saying the public finances are in a worse state than Labour realised.

But speaking to ContractorUK, top advisers to IT contractors made clear that their number one wish whenever a fiscal event comes around remains firmly in place.

'Off-Payroll Working Rules' repeal would be great at Autumn Budget 2024'

SG Accounting says it would be “great” if the Off-Payroll Working rules are revoked on Oct 30th, “for contracting and the economy.”

Bauer & Cottrell says "OPW rollback" would "ideally" be the Autumn Budget 2024 headline contractors wake up to on Oct 31.

Mellor & Co says repealing the April 6th 2017/21 reforms would end organisations’ “incompetence” at IR35 decision-making, and halt “illegal blanketing”.

'Never again repeat mini-Budget 2022'

But yesterday in her speech diarising Autumn Budget 2024 for Oct 30th, Reeves ruled out the very event that revoked the OPW rules.

Addressing the House of Commons, a serious-sounding Reeves said there will “never again” be “a repeat of” mini-Budget 2022.   

Even before her ruling out, SG Accounting’s Dan Mepham acknowledged his firm’s hopes of OPW repeal are a tad “unrealistic.”

And B&C’s director Charlie Hemsworth said while reverting to Labour’s IR35 of 2000 for all PSC engagements is ideal, it’s also “unlikely.”

'OPW repeal now too tainted by the Liz Truss Budget debacle'

Elaine Richardson, an IT contractor who defeated HMRC in 2011 after it accused her ECH Consulting Ltd of flouting IR35, agrees.

She believes Labour’s IR35 rules won’t replace the Tory frameworks because the move is “too tainted by the Liz Truss Budget debacle.”

Due to the hit on the coffers which reverting to ‘old’ IR35 for all PSC gigs would cause, Beansprout Consultancy doesn’t hold out much hope either.

'IR35 reforms drove too many contractors into employment to be reversed'

Speaking after Reeves was accused yesterday of £24billion in spending in her 24 days so far at No 11, Beansprout’s Helen Christopher told ContractorUK:

“I don’t see there being any rollback on October 30th of the 2017/21 IR35 rules, to those of 2000.

“The [IR35] reforms drove many contractors into employment, increasing PAYE/NI take for HMRC, and improving cashflow with it collected at source.”

'Single Worker Status could change how IR35 status is determined'

Christopher says more likely on Oct 30 is the introduction of Single Worker Status.

“But we all know the devil is in the detail with [the SWS plan]” she says.

“And I fear that actually defining what that status is, and what it means, will prove no less complicated than the current rule.”

Hemsworth, an IR35 specialist, warns Single Worker Status could even change how IR35 status is determined.

'Parts of Autumn Budget 2024 relevant to the contracting world'

“Labour’s proposals on enhancing workers' rights and eliminating ‘bogus self-employment’ will likely shape the parts of Autumn Budget 2024 that are relevant to the contracting world.

“But our hope is that Labour's consultation on Single Worker Status will be released by Oct 30th…. [as it] could change how IR35 status is determined.

“SWS has the potential to either make things simpler, or even more complicated, depending on how clear and practical new definitions are.”

'Stability'

With SWS an invariably big piece of work, and given the Single Worker Status consultation isn’t one of three unveiled yesterday in conjunction with Reeves’ speech (including a non-dom tax consultation), SG Accounting is keeping its expectations on the ground.

Mepham, the accountancy firm’s managing director told ContractorUK: “More realistically, I think most of the contracting and business community would like to see some stability [from Labour], in order to plan their affairs. 

“So short of full reversal of the off-payroll rules, there are things that can be done to help the somewhat overlooked and short-changed small business-owners from the last few years. 

“Most notably, I would like to see corporation tax reductions, and an increase in basic rate bands.”

'Chancellor Reeves hasn't promised anything to limited company owners'

At Beansprout, Christopher has the same strivers in mind -- and hopes the chancellor does too on October 30th.

“While Reeves today stated, again that income tax, NI and VAT rates will not be increased -- although I fear thresholds may change and personal allowances continue to be frozen, the chancellor has not specifically made any such promises to limited company owners.

“We would hope that Reeves retains the basic rate of corporation tax at 19%," she said, "but looks again at the marginal tax thresholds while considering increasing the £50,000 limit for the lower rate.”

But ever-mindful of the bottom line, Christopher and Mepham -- both chartered accountants, said the abacus doesn’t look good, even for their most grounded wishes.

'Doom and Gloom'

Beansprout’s Christopher said: “At Autumn Budget 2024 it would be good to see an increase in the Capital Gains Tax personal allowance, so that hard-working business owners can retain more of their realised investment on the sale or closure of their business.

“But it’s unlikely. And unsurprisingly, Reeves’ speech highlighted the inherited position [being] worse than anticipated.”

SG’s Mepham echoed yesterday afternoon to ContractorUK: “Everything leading up to Reeves speech today looks to be ‘doom and gloom.’ It appears to be lining up a position in order to increase tax rates -- so [with all of those announcements we’d hope to see for contractors], don’t hold your breath.”

'Entrepreneurs and businesses big and small'

In the Commons, the chancellor said: “The Budget and Spending Review will also set out further progress on our No. 1 mission: to grow our economy. Economic growth is the only way to sustainably improve our public services and our public finances.”

Later in her speech, Reeves added: “If we can create the stable conditions that investors need to thrive, we will return confidence to our economy so that entrepreneurs and businesses big and small know that this is the best place in the world to start and grow a business. That is the bedrock on which economic growth must be built.”