What recruiters should look out for in today’s Budget

Today’s Budget has been widely trailed, but what should recruiters look out for when Chancellor Philip Hammond stands at the despatch box in the House of Commons today?

Crawford Temple, CEO at PRISM, a trade body for service providers and payment intermediaries, says one thing he is looking out for is “moving the changes” made to IR35 affecting contractors in the public sector in April 2017 “into the private sector and the timing of it. That is going to be the key one”, he told Recruiter.

The changes to IR35 to which Temple is referring were introduced in April as a way of cracking down on the use of limited companies, also known as personal service companies (PSCs), in the public sector that the government believed were being used to avoid tax. 

The changes, which make the employer responsible for determining a contractor’s tax status and financially liable if the correct tax is not paid, have been widely criticised by the sector as an attack on the UK’s flexible workforce, as well as damaging to the economy. 

A survey of 1,500 contractors by ContractorCalculator found that 37% left the public sector after the reforms came into place. Of these 61% did so because they refused to work under the new rules. Now many in the sector fear that the same thing could be about to happen across the private sector. 

Sue Dodd, director of Agile Intelligence and author of Recruiter’s upcoming HOT 100 report, told Recruiter her priority is the economy. “The important thing is to keep the economy ticking over. That is the most important thing as far as the recruitment industry is concerned.” 

Other likely announcements of relevance to the recruitment sector are:

Housing: The Chancellor is expected to promise to deliver 300,000 homes a year.

Infrastructure: Expect a series of announcements on rail, road and other infrastructure projects.

Young people: more help for students and young people, including a possible cut in their National Insurance rate. Russell Dalgleish, a recruitment entrepreneur and adviser to the Scottish government, told Recruiter he would like to see “anything that encourages employers, particularly SMEs, to hire young people. 

“There are a lot of people coming out of colleges and schools, who are ‘digital natives’ but there seems to be a disconnect between them and employers.”

Tech: the Chancellor is likely to announce millions in investment to boost the sector.

Business rates: more frequent revaluations and a possible freeze on business rates could be on the cards.

Start-ups and investment: There could be an end to a tax break investors receive when they invest in the Enterprise Investment Scheme.

Public sector: the Chancellor is under pressure to provide more funding, particularly for the NHS. 

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