Budget update for contractors

Highlights:

As expected the off payroll rules will be implemented on 6 April:

"2.178 Review of changes to the off-payroll working rules (commonly known as IR35) – At Budget 2018 the government announced that it would reform the off-payroll working rules in the private and third sectors from April 2020. The government has recently concluded a review of the reform, and is making a number of changes to support its smooth and successful implementation. The government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced."

There is some good news on Entrepreneurs Relief (ER) as it was believed that this would be abolished. The lifetime limit has been reduced from ￡10 million to ￡1 million. This will allow the majority of contractors to avail of this relief provided they meet the other conditions for ER on the closure of their company.

Personal allowance remains at ￡12,500.

Higher rate threshold remains at ￡50,000.

No change to dividend tax (7.5% below total income of ￡50K and 32.5% above ￡50k, dividend allowance ￡2k).

Corporation tax remains at 19%.