Autumn Budget 2018 – What is your money on?
22 October 2018
Andrew Shaw, Business Development Assistant at Aspire Business Partnership, blogs on the Autumn Budget 2018 regarding the potential tax and spending changes for the financial year.
We know after Phillip Hammond’s announcement, that this year’s Autumn Budget 2018 (“the Budget”) will take place earlier than expected, on 29 October 2018. Since the announcement, we have seen an influx of publications forecasting the outcome of the Budget, making statements that predict the changes that will be made.
Due to Government’s focus on the outcome of the Brexit deal, we believe that this year the budget red box may be somewhat lighter than usual. However, there are some changes that Government have alluded to that a gambler might like to take a bet on.
For this blog only, Aspire plays bookie to give our opinions on the possible outcomes of the Budget, winners and losers. Please remember to gamble responsibly!
Take a look at the odds we have given to some of the changes – go big or go home!
IR35 extension to the public sector
In April 2017, Government introduced a reform to IR35 in the public sector and in May 2018, HM Treasury and HM Revenue and Customs (‘HMRC’) published a consultation to see if the reforms could be adapted to tackle non-compliance for off-payroll working rules in the private sector.
Do you fancy your chances on the Budget involving an IR35 reform in the private sector? We think the only debate on this one is when it goes to post!
Tackling in-work poverty
Reforming Universal Credit by increasing the work allowances for families with children is one step that might help address the rising tide of in-work poverty. Three million children currently live in poverty. It would mean, for example, that a lone parent with one child who works full-time on the National Living Wage would be £500 per year better off. Will the Chancellor see any merit in reforming this increasingly complex and unpopular system?
Taylor review – Potential changes to employment practices
- Extension of the right to payslips to all workers and improvement of the quality of information provided
- Extension of the right to a written statement to workers as well as employees
- Employment tribunal process and ACAS guidance
- Extension of the relevant break in service for the calculation of the continuous service qualifying period
- Holiday pay changes
- Right to workers to request a change in contract to improve predictability
- Enforcement of employment right
Due to the amount of changes in the Taylor Review, we can offer an accumulator that only wins if all of the changes are made in the Budget. Are you feeling lucky?
National Minimum Wage and National Living Wage
It is highly likely that the National Minimum Wage (“NMW”) and the National Living Wage (“NLW”) will increase in the Budget, therefore, all bets will be suspended on this topic. However, to save yourself from a potential unrelated losing streak of employment claims, prosecution by HMRC or employee grievances, make sure that you are aware of your obligations as an employer regarding the NMW/NLW.
Pension benefits loss for those on low incomes
The Low Incomes Tax Reform Group is focusing on an inconsistency in tax rules which means that more than a million people on low incomes could be losing out on tax relief on their pension contributions. Figures from HMRC indicate that in 2015/16, 1.22 million people could have been affected by this issue and that includes those automatically enrolled, as well as workers already in occupational schemes. The Chancellor would be wise to consider this issue very seriously in his budget with 1.22 million votes potentially at stake!
Changes to tipping
New legislation that ensures that tips go to the workers who have earned them rather than their employers.
Unpaid internships
Changes are likely to be made to ensure unpaid interns are not doing the job of a worker, and if they are, enforcing the payment of National Minimum Wage.
Do wellness programmes increase productivity?
Wellness programmes, with an attractive structure of incentives, can undoubtedly offer employers a significant opportunity for savings when their employees are engaged in the process. The overall objective of wellness programmes is to improve employee health and reduce the overall cost of health provision and days lost to illness. These initiatives also improve company morale and ultimately can increase productivity. Incentives for employers to improve their approach to wellness might lead to a much-needed improvement in productivity nationwide. Is this a step too far for the Chancellor?
National Insurance Contributions
The Chancellor’s u-turn on abolishing Class 2 National Insurance Contributions (“NICS”) implies that his sums for generating income from the working population may still be written in pencil. Will the promises to increase the PAYE threshold be withdrawn? Will additional contributions be charged to fund the NHS or will the extension of IR35 reform bring enough into the coffers?
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Draft Finance Bill 2018-19
Following the publication of the draft provisions and explanatory notes for the Finance Bill 2018-19 in July, Aspire published multiple news articles explaining the legislation and policy papers. We feel that these changes will be made, so the house won’t be giving odds for these changes, however, feel free to have look at our previous news items to remind yourself of what is likely to come.
Optional Remuneration Arrangements (“OpRA”) rules for taxable cars and vans
Tax Avoidance involving profit fragmentation
Penalty regime for late filers and late payers
Extension of security deposits into Corporation Tax and the CIS
Requirement to check subsistence evidence abolished from April 2019
Aspire Comment
Although we can only suggest areas that might be changed regarding the Budget, it is always useful to know what to look out for. Keep an eye on our website for further comments on the outcome of the Budget next week. P.S. Always remember to tip the dealer!
