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Spring Statement 2018 – What does it mean for contractors and self-employed?

March 13th, 2018

What it means for contractors and the self-employed is…

The main focus of the Spring Statement was the state of public finances. And, whilst this ‘bigger picture’ of the economy as a whole may not seem of great relevance to individuals, contractors, and the self-employed, it’s worth remembering that the overall health of the economy impacts on tax policy, which ultimately affects every one of us. Naturally, suggestions of tax cuts for 31 million working people should be seen as positive and the on-going work on housing should help more first-time buyers to take their first steps onto the property ladder.

Contrary to what many expected, there was no mention of IR35 regulations in the Statement, inspiring home in some private sector contractors that similar reforms to those that have been applied to the public sector may not be imposed upon the private sector until at least 2020.


The inaugural Spring Statement has just been delivered today at the House of Lords, providing an update on the overall health of the economy and the Office for Budget Responsibility forecasts, an update on the progress made since the Autumn Budget delivered in 2017, and an insight into the changes the government is considering ahead of the next budget.

Lasting just 20 minutes, the red box, official documents, and spending and tax announcements we’ve come to expect from the budget were noticeably absent. There were no major policy changes.


So what did we learn from the Spring Statement?

The key points:

  • The economy has grown for 5 consecutive years, forecasts for growth this year have been increased
  • Inflation is expected to fall back to the 2% target within the next 12 months, seeing wages rise faster than prices over the next 5 years
  • Employment has increased by 3 million since 2010 and the unemployment rate is close to a 40 year low. It is predicted that there will be over 500,000 more people in work by 2022.
  • In April, the National Living Wage will rise to £7.83, worth £600 extra a year for full-time workers. National Minimum Wage rates for under-25s and apprentices will also rise. Over 2 million people are expected to benefit from these increases.
  • Taxes cut for 31 million working people – next year, a typical taxpayer will pay £1,075 less income tax than 2010-11.
  • The government is seeking views on extending tax relief to support self-employed people and employees when they fund their own training.
  • The next revaluation of business rates, currently due in 2022, will be brought forward to 2021.
  • Investment in transport – The government is inviting bids from cities across England for the remaining £840 million allocated to improving transport in the Autumn 2017 budget.
  • The first wave of the £190 million Challenge Fund funding for digital connectivity allocated to 13 areas across the UK.
  • The Government is on track to raise the housing supply to 300,000 a year by the mid-2020s, as outlined in the Autumn 2017 budget. The Housing Growth Partnership, which provides financial support for small house builders, will be more than doubled to £220 million.
  • An estimated 60,000 first time buyers have already benefited from the abolishment of stamp duty for first-time buyers under £300,000.

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