Budget2016 (2): Good for small businesses - but not freelancers

Once again, freelancers were left feeling like the poor relation of the small business community.

While the Budget was generally welcomed as a boost for small firms on business rates and corporation tax, the freelancing sector was feeling down that their pleas to think again on the abolition of the travel and subsistence relief had fallen on deaf ears.

And there were concerns that the further restrictions on the use of so-called 'personal service companies' in the public sector would spread into the private sector. As had been speculated in the media, employers and agencies will have to take on the responsibility for deducting tax and NI from public sector contractors.

Damian Broughton, managing director of accountancy firm Danbro, said: "This was a good budget for small businesses and it's great to see the Chancellor delivering a range of incentives that will enable self-employed people to grow and develop.

"It's also pleasing to see a number of initiatives that will promote business and improve connectivity across the UK.

"The one big disappointment was that proposed restrictions on travel and subsistence expenses for those under 'supervision, direction or control' will go ahead as planned. We fear this could negatively impact the important contractor sector and put a brake on the economy.

"We have been part of far-ranging calls for a judicial review of this plan but that has been ignored. We've worked hard to make sure our clients who are affected by this will still benefit from working under an employment business but many others are not prepared for these changes.

"The move to make employers and agencies responsible for deducting tax and national insurance from personal service companies in the public sector is also a worry. This shift in responsibility will cause a lot of concerns among organisations and I fear also heralds a move to make the private sector take on the same responsibilities in the months to come.

"The Government has pledged to review IR35 – which governs this process – but the lack of clarity on the issue could cause significant issues for self-employed people and employers alike."