The new Chancellor, George Osborne, announced the date for the emergency Budget will be 22nd June 2010. Osborne has also launched a new watchdog, which will independently monitor government spending. The Chancellor believes this move will increase public confidence in the newly formed coalition Government by Conservatives and Liberal Democrats.
The new Office for Budget Responsibility watchdog will be truly independent, setting growth forecasts to assess the state of the economy’s finances. As the Conservatives and Liberal Democrats signed the coalition agreement they agreed to hold an Emergency Budget within 50 days of taking office. However, the Conservative Chancellor, George Osborne announced that an Emergency Budget held even sooner would aid the restoration of confidence in the UK economy.
The Chancellor has announced that the chief of the newly formed watchdog is to be Sir Alan Budd, a highly respected financial expert. Yet another move that could have an effect on many contractors and freelancers is the announcement on 24th May of where the £6 billion of cuts will be made. When the Office for Budget Responsibility reveals the true state of the economy, it is feared that estimates for tax revenue made by the Labour Government were too optimistic and growth forecasts not realistic.
As contractors and freelancers await the outcome of the Budget there will also be speculation as to whether they can expect either reform or abolition of IR35 legislation, which has caused much confusion for legitimate contractors. Many contractors have found working under an umbrella company much easier than becoming a sole trader or forming a limited company, which involves extensive knowledge of the legislation and regulations of HM Revenue & Customs.
Unless drastic changes are announced in the forthcoming Budget, it is advisable for contractors to maximise their income with the services of a reputable umbrella company.
