'Mixed news likely' for umbrella company contractors

Posted on 20 November 2008

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Alastair Darling's pre-budget report is likely to have a mixture of positives and negative impacts upon contractors, it has been claimed.

Contractor Calculator reports that the outcome of a consultation into travelling expense tax relief could be presented, with the Treasury expected to decrease the scope of umbrella company contractors qualifying despite opposition from the sector.

Meanwhile, the VAT Hire Staff Concession is unlikely to be retained, it is claimed, meaning contractors working in the charity and public sectors will become 17.5 per cent more expensive to hire.

In better news, the website predicts that plans for controversial new income shifting legislation could be dropped as a result of the economic downturn.

According to the news provider, relief could also be granted to small business holders in terms of a freeze in corporation tax.

The levy is scheduled to increase from 21 per cent to 22 per cent in April 2009, unless the government chooses to intervene.

Last week, Stephen Alambritis of the Federation of Small Businesses described the planned tax hike as an "awful" move.

Category: Tax & Legislation News

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