It’s Budget Day tomorrow; the weeks of speculation will be over and UK taxpayers, including umbrella company contractors, will discover what is in store for them over the next 12 months.
We already know that corporation tax is going to come down in April, but what about income tax? Will the Chancellor give in and get rid of the 50p rate, and if he does, what will take its place? A lot of experts claim that the top 50p tax rate has not been as successful as was originally anticipated, but if he is going to remove it, you can be sure that George Osborne will find another way to tax high earners.
Entrepreneurs are hoping that the Chancellor will come up with measures to help them obtain the finance they need to grow their business. The announcement of new Enterprise Zones would be welcomed, as would a relaxation of the rules surrounding NIC holidays. Currently, location is a qualifying criterion for NIC holidays and a lot of entrepreneurs are calling for the scheme to be extended to all areas of the UK.
The government also needs to take more action to clampdown on tax avoidance and evasion. Currently, HMRC offers disclosure facilities to specific sectors, but experts are now saying that offering a general amnesty that runs alongside the sector specific ones would be a sensible course of action.
Last, but definitely not least, we have our old friend IR35. The OTS has been slaving away to come up with a way to ensure this burdensome legislation is administered fairly. What will Mr Osborne have to say about IR35? We’ll find that out tomorrow…
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