The emergency budget was this afternoon read by George Osborne and here at Independent Contractor Services (ICS), we have compiled a list of key points which are likely to affect all contractors, whether you are a sole trader, paid via an umbrella company or even run your own limited company.
These key points are;
| Positive | Negative |
| The personal allowance will be increased by £1,000 to £7,475 in 2011-12, however high earners will not be entitled to this. | The standard rate of VAT will be increased from 17.5% to 20% from 4th January 2011 with the flat rate scheme being changed also to reflect the increase. |
| The Government remains committed to a review of IR35 and small business tax and will release further details shortly. | The higher rate income tax threshold will be frozen until 2013/14. |
| The Small Companies’ Tax Rate will be cut to 20% from 2011. | Capital Gains Tax increases from 18% to 28% for higher rate taxpayers from midnight tonight. |
| The landline levy to pay for high-speed internet will be abolished before it comes into force. | |
| The Government plans to publish central Government tenders online and free of charge by the end of 2010. |
In a survey by the PCG, 91% of freelancers and contractors believe it was a ‘tough but fair’ budget, do you agree?
Take our one minute survey about the Emergency Budget, and let us know what you think – just two questions to answer. Click here to do it now!
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