Section 2.40 of the Red Book says: “From April 2017 the government will make public sector bodies and agencies responsible for operating the tax rules that apply to off-payroll working through limited companies in the public sector. The rules will remain unchanged for those working in the private sector. The government will consult on a clearer and simpler set of tests and online tools. (Finance Bill 2017) (40).”
Other measures relevant to contractors include:
- Tax-free personal allowance to rise to £11,500 by April 2017
- A reduction in corporation tax, so by April 2020 corporation tax will be lowered to 17%
- Two new tax-free allowances worth £1,000 for micro-entrepreneurs
- Oil and gas contractors will benefit from a reduction in the supplementary charge of 10% and abolishing petroleum revenue tax, designed to stimulate exploration and investment
- Buy-to-let stamp duty rates confirmed to come into effect next month. Rates “to apply to larger investors too”. Use receipts to support community housing trusts
- Infrastructure: HS3 rail link between Manchester and Leeds given go ahead
- Crossrail 2 also to be commissioned by Government.
On the savings front, from April 2017, anybody under the age of 40 can open a lifetime ISA and save up to £4,000 each year. The Government puts in one quarter of the funds invested by the ISA holder.
There will be no tax upon withdrawal, and the funds can be accessed at any time for a small charge. The limit is £20,000, labelled by the Chancellor as: “Generous and completely flexible.”