Contractors and freelancers could be better off as a result of George Osborne’s announcement that the income tax threshold will change.
The REC said that temporary agency workers who only work for short periods will be especially delighted with the budget announcement. Many temps perform agency work on a part time basis and the income tax rise will ensure that their weekly pay packets increase.
In fact several points in the budget have been welcomed by the REC.
Kevin Green, from the REC, is pleased that the Chancellor got rid of the proposed employers NIC increase and raised the NI thresholds. This move should encourage employers to hire more staff, he said.
The reductions in small business tax and corporation tax will help Britain become an attractive place to do business and this in turn will lead to more job creation.
The REC approved of the Chancellor’s decision to impose a two year salary freeze on public sector workers. During the recession, many private sector employees were subjected to a similar freeze. It is also encouraged by the news that there will be a review of pension costs in the public sector.
With cuts of up to 25% expected in unprotected government departments, the public sector is going to have to review its operations. The REC has long been advocating the need for a flexible working model within the sector, similar to that already utilised by private sector businesses.
The main downside to the budget is the VAT increase which will take place next January. This, according to Green, will hit the supply of recruitment agency staff into the financial and charitable sectors particularly hard.
Finally Green said the REC welcomed the government’s plan to move people into work, thus reducing benefit costs. However, the benefits system does not currently help people who do temp work on an ‘as they can find it’ basis. He wants to see the benefits system reformed so that people don’t have to wait weeks before they can have their benefits reinstated if there is no available temporary work.
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