Autumn Budget 2017: Key Points for Recruiters
Today’s budget was one of the most critical in recent times. Ongoing Brexit uncertainty and shock news that the UK’s finances unexpectedly worsened in October 2017 left The Chancellor, Philip Hammond, with little room for maneuver.
Spring’s budget was a mix bag for recruiters. Reform to IR35 in the Public Sector and increased taxation hit flexible workers. However, a new strategy to make the UK a world leader in 5G technology, business rates relief revaluation and investment into science, technology, engineering and maths stimulated business confidence.
With “fiscal responsibility” being the repeated message, here’s our summary on what recruiters need to know about the Autumn Budget 2017.
Despite the Office for Budget Responsibility (OBR) forecast revising their productivity forecast downwards, recruiters should be encouraged by the OBRs forecast that an extra 600,000 people will be in work by 2022.
“A hub of enterprise and creation”
A new high-tech business is founded in the UK every hour. The Government is reinforcing their intent to reduce the time be every half hour by investing £500m 5G mobile networks, fibre broadband and artificial intelligence.
Embracing the advancements in electric cars and driverless technology, the Government is investing £540m to support the growth of electric cars, including more charging points
Looking for fast-growing companies in these sectors? Take a look at these:
Top 20 Funded UK Cyber Security Companies
Top 50 Funded UK Internet of Things (IoT) Companies
Top 30 Funded UK Automotive Companies
“The UK Firing on all cylinders”
Stimulating growth outside of London is a core priority. The £1.7bn Transforming Cities fund aims to improve connectivity, reduce congestion and bring in new technology to create high-quality jobs and spread wealth around the country. Recruiters operating in the six areas, including the ‘Northern Powerhouse’ and ‘Midlands Engine’, will help businesses in the region to scale-up, acting as the key conduit to talent.
Spring’s budget had little by way of positivity for flexible workers. Some of the actions the government took in the April 2017 budget to tackle non-compliant working practices and taxation in the flexible labour market financially impacted contractors.
IR35 in the Public Sector
What happened in Spring?
From 6 April 2017 all public sector bodies were made responsible for determining the IR35 status of any limited company contractors providing service to them. aPSCo have commented on ongoing concerns about the implementation, noting “Genuinely self-employed contractors can continue to work in the public sector and be taxed appropriately if the end hirer and their agency are managing compliance appropriately.”
What Now (Autumn Budget)?
Self Employment Taxation
What happened in Spring?
- For unincorporated businesses (sole traders) the rate of Class 4 NIC will increase from 9% to 10% in April 2018 and to 11% from April 2019.
- For contractors working through a limited company the dividend allowance will be reduced from £5,000 per shareholder to £2,000 per shareholder from April 2018.
Balancing the delicate situation of fiscal responsibility and politics, the government did not anger (more) the flexible workforce. No change.