The Autumn Statement, presented by Chancellor of the Exchequer Jeremy Hunt on Wednesday, the 22nd of November, was always going to be interesting for contractors.
A sustained spell of rising inflation and a cost of living crisis with interest rates climbing and soaring fuel costs have hit contractors’ pockets hard in the last couple of years. And, as is always the case in challenging economic conditions, businesses tighten the purse strings, and contract assignments become more challenging to find.
So, with the statement promoted as having a strong focus on stimulating economic growth, supporting UK businesses and getting people back into work, what did it all mean for contractors?
NIC Cuts Offer Short-Term Relief for Some Contractors
There was positive news for contractors employed by umbrella companies and those providing their services as self-employed individuals.
The relief came in the form of cuts in national insurance contributions and an increase in the national living wage.
Lower-level earners aged twenty-one or over will benefit from an increase in the national living wage to £11.44 per hour.
And, from the 6th of January 2024, Class 1 employee NIC will be reduced from 12% to 10%. The two per cent reduction was forecasted to save an average worker earning £35,400, approximately £450 in 2024-25.
Both changes will result in workers having more money in their pockets and less pressure from the cost of living challenges.
There were also NIC cuts for the self-employed, with Class 2 NIC being wholly abolished from the 6th of April, 2024, and Class 4 NIC being reduced from 9% to 8% from the same date.
Contractors can look forward with hope following the Autumn Statement
For contractors, the Autumn Statement’s commitment to stimulating growth in UK business looks to bode well for future work opportunities.
Many actions and plans included in the statement were geared toward stimulating investment and creating jobs. If forecasts prove accurate, contractors can hope for choice and longevity when looking for future roles.
One final point of note was the government’s guarantee of tougher measures and consequences for promoters of tax avoidance schemes. Such actions should give contractors and hirers peace of mind at the reduced risk presented by the temporary labour supply chain.
