There’s still two weeks until the Budget on the 30th October, but given the warnings sounded by both the Prime Minister and the Chancellor, it’s probably no surprise that business groups have been calling for the key changes they’d like to see. They cover a range of pressing issues, including off-payroll working rules, HMRC service levels, labour shortages, net zero, and business rates. 

The Primary concerns and requests we’ve seen so far are as follows:

Off-Payroll Working Rules: A Call for Fairness

The Association of Independent Professionals and the Self-Employed (IPSE) is calling for a fairer and more efficient approach to off-payroll working rules in its Budget submission. Commonly referred to as IR35, these regulations have continued to cause significant disruption, particularly for businesses and public bodies relying on freelancers and contractors.

According to an IPSE survey conducted in early 2024 with 1,300 contractors, 54% reported walking away from potential work due to disagreements over the client’s IR35 status determinations. IPSE argues that recent reforms have overly complicated the hiring of independent workers and led to unnecessary disputes.

They’re urging the government to find a more equitable solution, that allows freelancers to work without the constant worry of challenges from clients and HMRC.

Improved HMRC Services for the Self-Employed

In addition to off-payroll reforms, IPSE is advocating for better support from HMRC when dealing with the self-employed. Specifically, they want assurances that the Chancellor will not reverse the decision to prevent HMRC from making temporary phone line closures and other service restrictions permanent. This is particularly relevant given the recent announcements around digital transformation.

While IPSE acknowledges that digital services provided by HMRC can resolve many issues, they stress that the complexity of the UK tax system requires a personal touch. The ability to speak directly with an adviser is critical for the self-employed, particularly given the risks and penalties associated with any misinterpretation of tax rules.

Key Policy Proposals from the IoD

The Institute of Directors (IoD) has also put forward its preferred list of policy changes for the upcoming budget, focusing on five critical areas:

1. Fiscal rules that safeguard investment.
2. A clear business tax roadmap to support confidence and long-term planning.
3. Strengthening the labour market to address skills shortages.
4. Enhancing the UK’s trade performance.
5. Supporting small and medium-sized enterprises (SMEs) in the transition to net zero.

Addressing Skills and Labour Shortages

To tackle ongoing labour and skills shortages, the IoD recommends transitioning Skills England into an independent body responsible for advising on both current and future workforce needs. Additionally, they’re calling for a strengthening of the statutory code on dismissal and re-engagement, ensuring these practices are reserved for cases where the survival of a business is genuinely at risk.

The IoD also believes that zero-hours contracts should remain an option for businesses that face fluctuating demand, as this flexibility is essential for sectors where work hours can vary greatly. This goes against the proposals within the new Employment Rights Bill.

The Push for a Sustainable Net Zero Strategy

The IoD has called on the government to adopt a stable, long-term approach to achieving net zero, highlighting the urgent need for credible policies that guide businesses through the transition. A proposed ‘Help to Green’ campaign, originating from the Independent Review of Net Zero, includes providing SMEs with resources and financial support to help them plan and invest in sustainable practices. Such measures could accelerate progress towards the UK’s environmental goals while supporting business growth.

Looming Tax Increases for Hospitality and Leisure

UKHospitality is raising the alarm over a potential tax hike that could hit hospitality and leisure businesses in April if current business rates relief ends as scheduled on the 31st March. Without government intervention, these businesses are facing a dramatic fourfold increase in rates, pushing the sector’s total bills to £928 million.

The trade body is urging the Chancellor to introduce a permanent, lower rate for business rates in the hospitality sector. They argue that the current system disproportionately penalises hospitality businesses, which pay three times more than they should under the existing framework. A lower, universal rate, or ‘multiplier,’ would provide much-needed relief and stability for the sector moving forward.

Conclusion

As the Autumn Budget approaches, UK business groups are putting forward a range of urgent proposals aimed at easing tax burdens, supporting the self-employed, and addressing broader economic challenges.

The various requests highlight the need for government action to promote growth, stability, and fairness across the economy. The pressure is now on for Rachel Reeves to deliver solutions that address these concerns in her budget announcement.

As always, we’ll be listening carefully to the continuing speculation and conjecture around what may be included, in particular the comments made by the government as we draw closer to the end of the month. These sound-bites are often the early warnings of the changes that we’ll hear about on the 30th October, either as a way of testing the likely responses, or to soften any blows that may be coming.

As soon as we’re able to do so after the main event, we’ll get our summary of the main points from the Chancellor’s speech out to clients. If you’d like to receive your copy, and aren’t currently on our circulation list, now’s the time to pop your details in below, and we’ll ensure you’re included.

If the various media reports have worried you, and you’d like to have a chat in the meantime, please get in touch. We won’t know anything definite until the Chancellor presents her speech, but we can talk you through how some of the hypothetical options may impact your particular circumstances.