Since the last Budget in March 2017, there have been months of extensive political change; a general election with an unexpected outcome, numerous reshufflings of the cabinet and chaotic negotiations on the UK’s exit from the EU.
So, will Philip Hammond come up with anything new in his November 2017 Budget speech to the House?
There have been hints from the Treasury that IR35 rules will be extended to the private sector. These rules currently require public sector employers to deduct tax and National Insurance contributions from contractors’ pay, treating the contractor as if they were an employee for tax purposes, even though they are offering their services through a service company.
These rules are complex and many public sector employers have struggled with the practical application of these since they were introduced in April. Extending the rules to the private sector would remove the unequal treatment between the sectors.
One key area Peninsula clients are keen for more clarification on is Brexit and any indication on how they should be prepare for the UK’s exit from the EU would be welcomed.
Lastly, the Budget usually indicates the minimum wage the government would like to achieve by a certain year – this has previously been aimed at reaching £9 per hour for over 25s by 2020.
While increased wages for employees is welcomed in these rising inflation times, employers who are already struggling with rising wage costs, pensions, and the uncertainty over increased costs because of Brexit, may wait to see if the Chancellor will reduce the pledge or increase the time taken to get there.
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