Chancellor Rishi Sunak has instructed the Office for Budget Responsibility (OBR) to prepare new fiscal and economic forecasts to present to parliament on October 27th. The forecasts are, at present, not due to be accompanied by a Budget event, hinting at a delay to this year’s sighting of the red box.
While a publically broadcasted spending review is usual procedure, legally the OBR is only required to publish its bi-annual forecasts to parliament. This means Mr Sunak’s decision to present only to parliament on 27th October is not completely out of the blue, especially following delays to the Budget in both 2019 and 2020.
With the Coronavirus Job Retention Scheme ending at the end of September, it will take some time before the economic impact of this is able to be fully assessed. It is therefore hoped that delaying the Budget will allow the Government to provide greater certainty.
Delaying the budget could help contractors
Tax increases are expected in order to cover the costs of the pandemic alongside the Government’s planned social care reforms. As the UK continues to contend with a fragile economy in the aftermath of Brexit and the pandemic, a Budget delay could be favourable for contractors.
There have been early indications that Boris Johnson is expected to increase National Insurance. This will mean that businesses engaging contractors working inside IR35 will need to pay another one percent. Other personal tax increases that will affect contractors are expected. It has also been speculated that there will be an increase to Inheritance Tax, and with house prices increasing, more and more families are facing increasing Inheritance Tax liabilities. Individuals have been urged to review their estate before any changes are made by the Government.
When questioned about the date of the budget, Mr Sunak said “We will confirm in due course when the next Budget will be. However, we haven’t announced any Autumn Budget, so any consideration of one is purely speculation at this point.” Whilst the date of the Budget remains uncertain, it is vital that contractors keep themselves up-to-date with the latest developments.
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