Now that the dust has settled after the Chancellor's Autumn Statement on the 22nd of November, the team at Champion Contractors have taken stock of the announcement and thought about what it might mean for employment businesses and contractors.
With much of the statement focusing on backing business and stimulating growth, the Chancellor's plans included predictions of increased investment in businesses, job creation and more people returning to work.
Should these plans come to fruition and forecasts be accurate, the future could be positive for those providing recruitment services or flexible workforce support.
Autumn Statement Bodes Well for Employment Businesses?
With a long-term plan to unlock an extra £20bn of annual investment over the next decade, the statement has set a strong foundation for business growth.
The statement also included funding and investment support for various business areas, giving employment businesses confidence that increasing demand for skills will follow.
There were also some less prominent nuggets for employment businesses within the statement. For example, the double taxation issue that has blighted the Off-Payroll Working (OPW) reforms legislation was confirmed as being addressed as follows;
5.50 Off-Payroll Working (IR35) – calculation of PAYE liability in cases of non-compliance – The government will legislate in the Autumn Finance Bill 2023 to allow HMRC to reduce the PAYE liability of a deemed employer to account for taxes paid by a worker and their intermediary on payments received where an error has been made in applying the off-payroll working rules.
Reducing the potential liability of an incorrect IR35 determination should increase business confidence in engaging personal service company contractors and stimulate the temporary labour workforce.
Autumn Statement Delivers Immediate Gains for Umbrella Employees
Contractors and temporary workers engaged on an employed basis, either directly or via an agency or umbrella company, will see the benefit of NIC cuts in the new year. The same applies to those providing services on a self-employed basis.
In addition, the statement also included a commitment to tackling promoters of tax avoidance schemes. Point 5.59 outlined, “Tougher consequences for promoters of tax avoidance – The government is legislating in the Autumn Finance Bill 2023 to introduce tougher consequences for promoters of tax avoidance schemes. These include a new criminal offence for those who continue to promote avoidance schemes after receiving a notice requiring them to stop; and a new power enabling HMRC to bring disqualification action against directors of companies involved in promoting tax avoidance, including those who control or exercise influence over a company. These changes will take effect from Royal Assent of the Autumn Finance Bill 2023.
Such actions are a positive step toward protecting umbrella contractors' welfare and financial security.
Summary
At Champion Contractors, we support any initiatives that contribute to a safer, more compliant and prosperous temporary labour sector.
The autumn statement included several positive moves, big and small, for the agency, contractor and umbrella sector, and we're looking forward to supporting what we hope will be a buoyant market in the foreseeable future.
For a detailed overview of the autumn statement, you can see our report on the autumn statement here.
Alternatively, contact the Champion Contractors team on 0161 703 2549 or email info@championcontractors.co.uk.