The Spring Budget, presented by Chancellor of the Exchequer Jeremy Hunt on Wednesday, March 6th, followed a familiar path.
When Hunt presented his Autumn Statement in November, the key messages were curbing inflation, stimulating investment in UK businesses, and getting people back to work. The message from Hunt on Wednesday gave us more of the same.
The Spring Budget offered plenty of promise for the UK’s temporary labour sector, but what will economic growth and getting people back to work actually mean for contractors and recruitment agencies?
Contractors to Get Further Relief From NIC Cuts and More
Unsurprisingly, with a general election on the horizon, there was another big statement from the Chancellor to sway voters.
Following the reduction of Class 1 National Insurance in November, Hunt confirmed a further two per cent cut will take effect from the 6th April. The reduction is forecasted to save an average worker earning £35,000, approximately £450 per year. The cut means that Class 1 NICs have been reduced from 12% to 8% over the last five months. Umbrella contractors will already have begun to see the financial benefit of the first reduction and should see a further impact next month.
Self-employed individuals, who will see Class 2 NICs abolished in April, were also awarded a further 2% reduction to Class 4 NICs. This reduction is in addition to the 1% reduction announced in November, meaning that from April, Class 4 NICs will reduce from 9% to 6%.
Contractors that provide their services via their limited companies were a little aggrieved at the lack of support offered in the Autumn Statement. This time, while there were no significant changes in dividend payments or corporation tax rates, The Chancellor did provide some relief to SMEs by raising the VAT registration threshold from £85000 to £90000.
Will Business Boom as a Result of Consecutive Budget Statement Boosts?
Continued commitment to investing in British business and stimulating economic growth make promising reading for recruiters in the UK.
In Wednesday’s Spring Budget, the Chancellor committed more funding to support several UK regions and private and public sector businesses. This continued investment and the government’s determination to attract more people into work and “make work pay” point toward potentially busy times for recruiters and contractors alike.
For further information on how the spring budget may affect you, contact the Big Fish team.
