Chancellor Hammond’s first (and final) Spring Budget finds us just weeks before the deadline for triggering Brexit. After a host of unexpected announcements in the Autumn Statement, the Spring Budget thankfully had few changes in store for contractors and consultants.
The main bit of news for independent professionals is a reduction in the tax-free dividend allowance from £5,000 to £2,000 from April 2018. This change will be introduced with the aim of minimising the gap in tax being paid by employed workers and those with their own company. While this change will result in independent professionals paying more tax, it’s unlikely to have significant impacts on a majority of contractors and consultants. Some solace can at least be found in the tax-free personal allowance increase.
The Chancellor’s Budget announcement showed the Government’s clear intent to clamp down on those who use contracting merely as a tax-avoiding technique. We expect to see more and more of these measures in the future. But for those of us who have made the move to contracting as a lifestyle choice; one that offers more flexibility, reward, work/life balance and access to unique or specialist projects, then the next tax year will be business as usual.