Boris Johnson Resigns
Boris Johnson resigns after 48 hours in politics that must have seemed like a lifetime this week. After holding out longer than necessary, the inevitable speech came that resulted in Boris Johnson leaving his role as Conservative Leader after close to 3 years in charge.
Boris Johnson final speach outside of number 10
What does this mean for the Conservative Party and, just as importantly, the UK economy over the next 6-12 months.
Doubtless there will be a clamour from the Tory backbenchers for tax cuts and possibly even a tightening of the purse strings. But what are the possible tax cuts and how will these benefit those in the world of contracting?
- Raising the personal tax allowance:
Frozen by Rishi Sunak at £12,570, the allowance may be pushed higher, especially considering the increasingly significant burden of inflation on the average consumer. This would help all contractors and immediately give a higher take home pay.
- Scrapping the increase in NICs:
The increase of 1.25% to both Employer’s and Employee’s NICs brought an immediate increase in tax revenue for the Government. This has been somewhat offset by the introduction a higher NI allowance for employees. There remains the possibility of considering employers in a similar way.
- Postponing the CT increase:
Corporation Tax is scheduled to increase, on a sliding scale, from April 2023. The Government’s aim was to increase revenue while purportedly remaining competitive in comparison to comparable economies. This increase may be reviewed in order to promote sustained economic growth in the UK.
What next?
It remains to be seen who will become the next leader of the Conservatives and how this will shape the future tax policy of the Party. What is certain, is that the decision making will not be easy. Balancing inflation, economic growth and paying off the enormous debt accrued due to COVID-policy will be the priority of the next Tory Cabinet and the solution to the problem is surely not a simple one!
If you or any of your workers have any questions about their tax positions then please do drop us a call or email or leave your details on THIS TAB for a call back at your convenience.