On the 27th October, the Chancellor of the Exchequer, Rishi Sunak, delivered the Autumn Budget 2021 announcement. Unlike the Spring Budget, which focused heavily on the plans to get through the coronavirus pandemic, the focus of this budget was more on growth coming through the other side of the pandemic. Sunak began positively, stating “Employment is up. Investment is growing. Public services are improving. The public services are stabilising. And wages are rising”.
But what does the Autumn Budget mean for freelancers? Here’s the Dinghy guide to what was in the Budget this year, and how we think it might affect freelancers.
The state of the economy
Sunak announced that the inflation rate was 3.1% in September and due to rise to an average of 4% next year, according to the Office for Budget Responsibility (OBR). Positively, the OBR is forecasting that the economy will return to its pre-covid level at the beginning of 2022 – 2 months early than previously thought. The OBR has also forecast unemployment to peak at 5.2%, which was initially forecast to hit 12%.
Spending on culture and heritage
The arts and culture sector were mentioned in the Budget, with Sunak stating there would be levelling up to protect culture and heritage. £850 million will be invested to protect museums, galleries, libraries and local culture, as well as £2 million being set aside for a new Beatles attraction in Liverpool. In addition, Sunak declared that 100 regional museums and libraries would be renovated, restored and revived.
In addition, for theatres, orchestras, museums and galleries, the tax relief support has been doubled to 2023, and it won’t return to normal rates until 2024. The creative arts industry were somewhat overlooked last year, with theatres having to close for the majority of the pandemic (and we all remember poor Fatima). Hopefully, this support will be a welcome relief for freelancers working in this space, with more work opportunities becoming available to them.
Investment in growth and increased spending
Sunak also explained the growth plans in the budget, which included £1.7 billion of investment in the infrastructure of everyday life, with £170 million in Scotland, £120 million in Wales and £50 million in Northern Ireland. The Budget also set aside £5 billion to remove unsafe cladding from the highest risk buildings, no doubt an ongoing project in the wake of the Grenfell Tower fire in 2017. Sunak also pledged:
- £130 billion investment in economic infrastructures like roads, railways, broadband and mobile.
- £21 billion on roads and £46 billion on railways.
- £5.7 billion for London-style transport systems across Greater Manchester, Liverpool City, The Tees Valley, Yorkshire, West Midlands and the West of England.
- £2.6 billion for 50 local road upgrades and £5 billion for local roads maintenance.
These areas of growth will naturally provide more employment opportunities throughout the UK, which hopefully will trickle down to freelancers.
Although there had been calls for a review of IR35, there was no mention in Sunak’s speech or the full budget document. Now the IR35 reforms are firmly embedded, it was unlikely that this would have been mentioned. Currently, the Finance Bill sub-committee is calling for evidence on the off-payroll rules in the private sector and how these rules are working in practice. If you’re a sole trader, IR35 won’t apply to you, so don’t need to worry about this tax legislation. If you still aren’t sure, you can check out our blog on if IR35 applies to freelancers.
Sunak also addressed the Net Zero strategy, investing £30 billion to create new, green industries of the future. Sunak also announced a new investment relief scheme to encourage businesses to adopt green technologies, like solar panels. At Dinghy, we are committed to doing our bit for the planet. That’s why we are registered with ecologi, who compensate our carbon footprint by various projects. We’ve also put together some tips on what freelancers can do to be greener.
Other points from the Autumn Budget that could affect freelancers
Other points raised in the budget which may affect freelancers included:
- Increasing the national living wage next year to £9.50 an hour.
- Increasing the working allowance to support working families.
- Temporary visas to address the driver shortage.
- A target to increase Research and Development investment to £22 billion a year by 2026-27.
- Public sector workers to resume the normal, independent pay setting process.
Hopefully, some of the news announced in the budget will provide you with new work opportunities. Make sure you’re well placed to take on new work as it arises by checking that your business insurance is up to date. Dinghy’s policies are tailored to freelancers and you can get all your cover in one flexible package, that you can turn on and off with the ups and downs in your workflow. For a quick, no-hassle quote, head to our website.