Fylde firm blasts Autumn Statement tax ‘punishment’

Damian Broughton of Danbro

Damian Broughton of Danbro

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Although businesses across the Fylde coast were generally welcoming of measures in the Chancellor’s Autumn Statement, Philip Hammond came in for criticism from some fronts.

Lytham-based accountants Danbro said he had punished self employed and contractor workers.

Executive chairman Damian Broughton said: “There was some good news for contractors and the self-employed.

“The wave of investment in housing and infrastructure will create opportunities and cuts in corporation tax will help but the overall message from this Autumn Statement was a bleak outlook for many freelance workers.

“However, despite reviews into modern employment being launched by the Government and other bodies like PRISM, this Autumn Statement has punished contractors again. These key workers are increasingly being taxed like employees, but have none of the benefits.” He said one of the key outcomes was a decision to forge ahead with IR35 reforms in the public sector which will see the recruitment agencies or organisations who engage the worker having to decide whether they fall under intermediaries legislation.

HMRC estimates 90 per cent of the 20,000 people who operate as contractors in the public sector will be caught out. The Chancellor also said the five per cent tax-free allowance would be removed as workers no longer had the administrative burden of deciding their status.

Mr Broughton said: “We’re puzzled that the five per cent tax-free allowance has been abolished as this is supposed to be for the ongoing costs of running a limited company, not just for the initial admin burden of assessing your status.

“People who provide freelance skills to public sector bodies will now have to change the way they operate and, for many, work through an employment business as there are fewer incentives to have your own company.

“The Government is continuing to squeeze the lifeblood out of this sector. HMRC are tackling the abuses of the few by applying wholesale changes and this only serves to penalise the majority who operate fairly.

On the streets of Blackpool the measures were described as nothing new.

Civil servant Jayne Boardman, 44, said: “Give with one hand and take with the other! Small decrease in income tax payable, but house and car insurance to cost more. No change to tax on petrol, but you can bet the price will still fluctuate ridiculously.”

Community volunteer Ann Higginson, 66, said: “Why forecast when all your forecasts get over-ruled? No green energy relief. This was not a visionary financial statement at all, just more of the same short-sighted nonsense”.