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Contractors could benefit from infrastructure boost in gloomy Autumn Statement
Posted Nov 30, 2011
The Chancellor's Autumn Statement will probably go down in history as one of the most depressing public finance statements ever made, although some of the measures may have a positive knock-on effect for contractors in the coming years.
After downgrading the UK's future growth prospects, as expected, George Osborne outlined a wide range of new measures aimed at driving business growth.
Key business measures
Some of the key measures included:
- The creation of a new National Loan Guarantee Scheme worth up to £21bn. The Government will provide guarantee loans made by the banking sector, providing lower interest rates to borrowers in the process.
- A £1bn Business Finance Partnership is to be created, to help medium-sized firms access finance.
- A range of measures to boost investment in small enterprises, including reforms to the EIS and VCT schemes, and tax relief to business angels.
- The business rate holiday for small enterprises will be extended to the end of the 2012/13 tax year.
- A deal with pension fund investors will see a big increase in investment in public sector infrastructure projects.
- Employers will be able to hire and fire staff more easily, without fearing the cost and stress of tribunal claims.
- Progress is apparently being made on the possible merger of the income tax and National Insurance regimes.
- The proposed 3.02p rise in fuel duty in January 2012 has been postponed until August 2012.
- Rail fare rises to be capped at 6% (inflation + 1%), rather than 8%, from January 2012.
- Working age benefits and state pension to be increased in line with inflation.
- Most tax credits will only be increased by below-inflation levels (aside from the disability element).
- Various regional initiatives have been announced. The Regional Growth Fund has been allocated a further £1bn.
Contracting Industry Comment
Most industry comment has focused on the increased investment in public infrastructure, which may well create opportunities for contractors across a number of industries.
Derek Kelly, Group Managing Director of the Parasol group of companies, said:
"Significant investment in public infrastructure will create opportunities across the UK for skilled temporary workers, be they limited company contractors, umbrella company contractors or micro-businesses.
"Anything that fosters the development and growth of small businesses has a knock on effect of creating opportunities for freelance professionals who many small businesses rely on when the cost of employing someone full time can be prohibitive."
"The freezing of tax credits for those on higher incomes will effect some contractors and freelancers. However, this could be offset, particularly for those who work via their own limited company, by some of the measures the Chancellor has introduced to help small businesses such as waving capital gain tax and 50% income tax relief for investors in small start-ups."
Simon McVicker, Head of Public Affairs for PCG said that the industry did not expect any announcements to be made on contractor-specific issues such as IR35 or the AWR.
The organisation also noted the indirect benefits to be had by contractors from some of the broader measures announced by the Chancellor:
"If proposed measures such as improving small business loans are carried out we could see a positive knock on effect for independent professionals as credit availability migrates into the potential to take on more contracts and contractors."
"Government procurement has too long been an issue for all SME's and we are pleased to see this both mentioned and taken seriously by Mr Osborne, any measures to improve access to pitch for these contracts for freelancers will only become more important, particularly as public sector cuts appear to be revised to over 710,000."
You can read the 'official' HM Treasury documentation here. All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.
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