Budget 2020: What does it mean for you?
On 11th March, Rishi Sunak delivered the Budget for 2020. Not only was it his first Budget as Chancellor but also the first under Boris Johnson’s government and as a non-EU country.
Big things were expected in relation to IR35 – not to mention the recent pandemic of Coronavirus. But what exactly do the announcements mean, and how will they affect you? Here, we answer those questions as best as we can.
IR35 legislation changes to go ahead
We all thought that IR35 would take centre stage. Some forecasted it would be delayed, others said it could be cancelled altogether. Few could have predicted what actually happened.
For starters, the off-payroll working rules weren’t directly mentioned in the speech. Instead, the Chancellor stated that businesses needed a fair tax system and briefly mentioned new rules for aggressive tax evasion which would raise £4.4 billion in additional revenue.
After a bit of digging around in the official Budget, it was revealed that “the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced.”
The devil will be in the detail. But there’s no denying that the reform is still going ahead. However, the current climate could mean that the government will be more relaxed. The Chancellor even confirmed a soft approach with no enforcement during the first 12 months for those taking reasonable care. But this doesn’t mean you’ve got extra time to prepare.
As expected, Rishi Sunak used the speech to reveal the government’s plans to tackle Coronavirus. And we’re delighted to hear that self-employed workers will have greater access to benefits if they are forced to self-isolate.
Self-employed workers will be able to claim Employment and Support Allowance (ESA) from day one of “illness” rather than day eight. The minimum income level will be removed from universal credit temporarily, giving access to an emergency pot of £500 million.
With an estimated 20% off work, the Chancellor explained that productive capacity would likely shrink having a significant impact on our economy. However, Sunak reiterated that this will be temporary and that our government is prepared. Smaller enterprises (with less than 250 staff) will also receive a reimbursement for any sick pay for up to 14 days.
Support for self-employed
Finally, the government has reviewed how support for contractors and those self-employed can be improved. With better access to finance and credit, such workers will also benefit from the government’s continued efforts to tackle late payments.
But that’s not all. It will also now be easier for self-employed workers to find information that is relevant to them and their business with a new interactive guide for the tax system – and a digital support system.
What should I do?
While no-one can say how Coronavirus will pan out and what affect this will truly have on the national workforce, one thing cannot be denied – IR35 will take effect in 2020.
So, whether you’ve already started to prepare but need a little guidance or you were waiting to see what the Budget revealed, you need to act now so that it doesn’t have a detrimental impact on you and your work from 6th April. The alternative is that you risk losing key revenue streams, talent and your competitive advantage come April – and beyond.
Workr Group is here to help you meet your responsibilities – all while getting prepared for IR35 and maintaining business as usual. And, many of your competitors are already prepared for the changes…