With just two days to go until Chancellor George Osbourne delivers his final Budget before the 2015 General Election, the Association of Independent Professionals and the Self-Employed (IPSE) have released a new report detailing a Budget wish list for contractors and freelancers, outlining some of the changes they would like to see from The Treasury on Wednesday 18th March.
Let’s take a look at what some of their main proposals are and how they stand to benefit the lives of independent professionals across the country.
Simplifying the tax system
At the top of IPSE’s list is a call for the Government to commit to extensive tax simplification measures. This is a perennial issue, especially for one person limited companies, for whom navigating complex tax legislation (notably IR35) is a time consuming and costly issue.
Interestingly, Derek Kelly, Managing Director of ClearSky Contractor Accounting, writes for Contractor UK that he predicts that the UK’s independent professionals would actually appreciate maintenance of the status quo when it comes to tax legislation. Specifically, he believes that effective enforcement of current IR35 legislation would receive a warmer welcome than more rules and excessive complications being put in place.
Improved connectivity for small businesses
Being contactable throughout working hours (and after) is a non-negotiable for freelancers. Whether you run your business from home, or you travel from site to site, having a high-speed broadband or 4G connection is crucial to your success.
This is an issue that has been raised in recent years by many figures involved in advocating for an improved status for freelance professionals. Earlier this year IPSE released their report, Infrastructure for independent working: boosting workhubs, broadband & mobile coverage, which explores the need for those who run their own businesses to have easy access to high quality connectivity.
The Treasury has the power to funnel more national resource to improving the nation’s connectivity infrastructure. This would not just benefit smaller and one-person businesses, but also the country as whole, particularly rural areas, where connectivity is an issue across the board.
Making business rates more affordable
This request refers specifically to shared work spaces and work hubs that are popular with freelancers that don’t run their business from home. Co-working in shared work spaces is now a booming industry and a cut in business rates is thought to only improve their popularity.
The philosophy behind this is that when a number of freelancers share a work environment it can increase the likelihood of collaboration between freelancers in connected fields. Since freelancing is proving to be such a boost to the UK economy, it stands to reason that the Government will want to do everything they can to promote collaborative projects that could potentially lead to more work.
Lowering tax on training
There have long been tax implications for the self-employed who wish to train to improve and diversify their skills. Typically, if an independent professional wanted to learn a new skill with a training course then they would be subject to tax deductions.
This legislation makes it costly and generally more prohibitive for the self-employed to gain new skills and make their businesses more competitive. A relaxation on the rules surrounding taxation of training for the self-employed will help to build the burgeoning freelance sector in the UK.
Simon McVicker, Director of Policy and External Affairs at IPSE, commented that, “The Government should use this Budget to reaffirm its support for this vital part of the labour market”, which seems to be an overall theme for many freelancers and one with which we agree.
If the Coalition government wants to remain to be seen as the party that helps small businesses then there must be key infrastructural and policy changes made on Wednesday to make Britain an economy that is nurturing to freelancers and independent professionals.
Do you have any predictions for the forthcoming budget? Do you agree with IPSE’s calls for policy change? What alterations would you like to see as a nod toward freelancers? Let us know in the comments or join the conversation with us on Twitter or our new Facebook page.
And make sure you join us on Thursday for a round-up of Budget 2015 and the impact we think it will have on the freelancer’s year ahead.