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How the Autumn statement has affected Freelance Workers

During 2015 the Government announced their intentions for freelance workers during the Autumn Statement. 

It looked at a variety of different aspects of freelance working; especially taking into account those who provided their service through an umbrella or intermediary company. 

Some of the details of what these new rules and regulations will be were vague; and confusion seemed to be rife as to what these changes would actually mean for freelancers around the UK.

With the April 2016 changeover date steadily creeping up we have looked into some of the most major changes that were planned and set out to explain what we think these will mean for freelancers. 

Travel and Subsistence

One of the biggest areas to see change has to be within Travel and Subsistence. 

The government has laid out their plans to restrict tax relief made on travel and subsistence claims for people who work through an employment intermediary such as an umbrella company or a personal service company. 

One month rule

Another change that the Autumn Statement signified for Freelance workers is the one month rule.

In summary, this meant that any contractor (regardless of industry) who provided a service to their client would be required to move to the company’s payroll if the work continues for more than one month. 

This can have a huge implication for not only freelancers but those, quite often smaller companies who frequently use their services. Some of the issues that could arise from this particular ruling include:

  • An increased rate of paperwork to be completed
  • Frequent processing of P45’s when the project has completed
  • Possibility of payments being made to the freelancer when there is a break in work

They may seem like minor issues, however they can create increased work and even put some people off of setting up their own business.

Let’s see what April 2016 brings

With the limited information that has been released; the implications of these proposed changes will not be realized until the change has happened. 

There is a chance that it could have minimal impact on freelancers and companies alike; but it could also signify a time of uncertainty for both parties when it comes to working on a project. 

The April change is ever looming; we will be interested to see what it means for those who have decided to set up business and work alone.