Few Surprises in 'Political' Budget

29.03.2010

Initial reviews of Alistair Darling's budget announced on Wednesday last week suggest that there are no unexpected changes for the vast majority of contractors. The budget by and large followed the actions indicated in the pre budget report. 50% tax bands and reductions in allowances and pension relief which will affect higher paid contractors were confirmed. So far reviews of the detailed budget document indicate there have been no changes to mainstream contractor concerns like IR35, Section 660, umbrella expenses and NICs on dividends from contractor limited companies. VAT remains at 17.5%, despite some forecasts of a 2.5% increase. Perhaps the most significant statements of intent revolved around targeting various avoidance schemes using tax loopholes such as those operating offshore and others utilising Employment Benefit Trusts to make disguised payments. However, for now, most commentators are treating this budget with a grain of salt, expecting the 'real' budget to come after the next election.