We will be publishing all the details on how the Budget affects IT Contractors as the Chancellor speaks.
1. Corporation Tax for Small Business will not now increase by 1p in the pound next year as planned. It will stay at 21% as opposed to the 22% it was to go up to. This will now be deferred.
2. VAT will go back to being 17.5% as planned.
3. All NI rates to increase by additional 0.5% for all those earning 20,000 or more from 2011. It was already scheduled to go up by 0.5% from 2011.
4. Economy to shrink by 4.75% this year.
5. Economy to grow by 1-1.5% in 2010.
6. Borrowing to be 178bn - mainly caused by lowertax receipts and VAT.
7. No increases, it appears, on alcohol, cigarette and petrol duty
8. Pensions will go up by 2.5% (for those older contractors who never saved up).
9. Public sector wage increases to be capped by 1% for the next two years (so going permie is not the way out).
10. Higher rate tax bracket to remain at 43,000.
In recent years, we have seen the main interest for IT Contractors coming after the Budget in the small print or in Appendixes added to it, e.g. in the area of Umbrella Companies or Managed Service Companies so we will have to see if there are many major changes there.
The Chancellor says that he is going to clamp down on tax dodgers. We will have to see if he includes IT Contractors in that.