Spending review did not mention Brexit and little support for small businesses

Robert Salter a Director at the leading tax and advisory firm Blick Rothenberg said: “it is sad to notice that the Chancellor has not mentioned Brexit in his speech – despite the problems this will cause to the British economy and the very real additional costs that will arise for British firms in a number of areas.

“ Whether it is the loss of access to EU labour for those companies in sectors which are traditionally ‘unattractive’ to UK citizens (e.g., hospitality and food production) or the risk of double social security costs arising for businesses with UK employees active in the EU, this speech represents – in many respects – a lost opportunity to help businesses – especially smaller businesses handle the delays and additional costs which are probably increasingly inevitable. This isn’t the way for a Government which openly talks about building a ‘global Britain’ should be acting.”

He added: “ Whilst Rishi Sunak has promised capital spending of £100bn over the coming years and £4bn on a restart programme for those who’ve been made unemployed, to help ‘level up’ the country and to ‘build back better’ from Covid, there appears to be little obvious support in today’s plans for small businesses and the self-employed, especially as one has to assume that the great majority of this capital expenditure will be awarded to larger businesses.

For example, as things stand, there is no suggestion that the proposed IR35 rules related to the taxation of small freelance contractor companies and which are due to come into effect from April 2021 will be relaxed. This is despite the fact that these rules represent a real double whammy for contractors, in that the result in freelancers often being ‘taxed as employees’ whilst not being refused any of the benefits associated with employment – e.g., paid holiday, job security and employer pension contributions. Moreover, the changes to IR35 are a direct attack on the flexible labour markets which have been a hallmark of the UK economy for 30+ years and something which undermines the Government’s claims re wanting to encourage a flexible, global economy after Brexit.”

Robert said: “ Similarly, no support has been announced for those people who are directly self-employed and are presently ineligible for the Government’s Self-Employed Income Support Scheme (SEISS) – e.g., because they only set up their businesses in the 2018/19 tax years (or potentially the later part of 2017/18 tax year). Taken together, the lack of support in this regard, can only be taken as a sign that the Government has little interest or understanding of the challenges freelance contractors are presently facing and little inclination to support such entrepreneurs.”