Spring Statement - What Recruiters Need to Know

The Chancellor delivered his Spring Statement this afternoon, the first in the government’s new budgetary cycle which will see just one major fiscal a year take place in the autumn. The Chancellor responded to forecasts from the Office for Budget Responsibility (OBR) and announced more than ten consultations on issues ranging from VAT to plastics to tobacco.

One issue that didn’t feature however was IR35. At the Autumn Budget, the Chancellor said that he planned to consult on non-compliance with IR35 in the private sector. Many had expected the Chancellor would choose today to launch his consultation with a view to introducing changes in 2019. It is encouraging that there has been no announcement as of yet. We hope that the government is instead focussing on developing a more holistic approach to employment status in line with Matthew Taylor’s recommendations.

Ahead of the Spring Statement, in our representations to the Treasury, we stressed that introducing changes to IR35 in the private sector would be premature, as the impact of the public sector changes is not yet fully known and there are still issues with implementation that need to be rectified. You can read our full response here. 

While there were no major tax or spend announcements, there were some updates on the allocation of education and skills funding. These include: 

• T-levels – £50 million to help employers prepare for the rollout of T-Level work placements from next month. Our Future of Jobs  report highlights the importance of work experience and employability and we’re pleased to see that additional funds are being made available to support employers to offer work experience. 
• Construction skills – £29 million for the construction skills fund which will open for bids next month to develop up to 20 construction skills villages around the country. This is good news for construction sector members and a key plank of the government’s industrial strategy. We’ll be bringing together members to discuss the industrial strategy and the opportunities it offers in Manchester in April. 
• Apprenticeship Levy – The Chancellor acknowledged that the Apprenticeship Levy is still causing issues for businesses and allocated £80 million to support small businesses to engage apprentices. This support is welcome but we would have liked to have seen progress on broadening the levy into a more flexible training levy. We’ll be continuing to make the case for this. 
• Training for the self-employed – The government will also be consulting on "the extension of tax relief for training by employees and the self-employed to support upskilling and retraining. This is a welcome development, reflecting Matthew Taylor’s calls for training to be made available for all, regardless of the contract they have. 

There were also consultations announced on:

• Tackling the scourge of late payment, an ongoing problem for small businesses in particular
• Business rates and moving to a more frequent system of revaluations, following on from earlier announcements in the Autumn budget 
• The taxation of the online platform economy to ensure a level playing field 
• The VAT threshold for small businesses which we will review and feed into if needed.

We’ll be continuing to monitor developments with IR35 and we will push the government to make improvements to the system in the public sector. We’ll also be focusing on responding to the series of consultations published by the government last month in response to the Matthew Taylor review. We’ll be gathering your views through webinars and member meetings over the coming weeks.

In the meantime, if you have any questions, please email policy@rec.uk.com.