The General Election on the 8th June resulted in a hung parliament, and since then we have seen the Conservative Party forming a minority government with the Democratic Unionist Party.
So, what does the election result mean for contractors?
Now the government no longer holds a majority, unpopular policy proposals are likely to be given lower priority. Proposals such as rolling out IR35 to the private sector have received great criticism, and now critics of said proposals will have more power as Theresa May will be more reticent about bringing these proposals to Parliament.
A proposal that has been bombarded with criticism within the contractor community, the proposed £3,000 reduction in Dividend Allowance, could significantly impact the finances of contractors; with them potentially having to pay £250 more in tax. However, with the introduction of the Finance Bill, this proposal was dropped but contractors should be fully aware and prepared in case these changes should be reinstated.
Making Tax Digital
A change that could have positive benefits for contractors; the plan to digitise the UK’s tax system (Making Tax Digital) has, for the time being, been set aside. This means that contractors, who would previously have had to very quickly acquaint themselves with the system and brand-new processes, are able to breathe a sigh of relief. However, it is likely that in the not too distant future, the Making Tax Digital changes will begin again.
Whilst contractors may not feel the effects of changes as result of the election immediately, it is inevitable that these changes will be introduced at some point, changes that will significantly impact the contractors’ finances. Keeping well informed is vital so that contractors can be prepared for any changes to come their way.
We have a number of services that could take away much of the burden experienced by contractors and the self-employed, take a look at our website for more information on how they could benefit you.