IR35 U-Turn – This is a major blow for recruiters and contractors alike
Just a few short weeks ago, Kwazi Kwarteng declared that the IR35 off-payroll reform would be repealed, giving the contracting community a glimmer of hope that this would bring more opportunities to the market, and allow contractors to once again decide their own IR35 status. However, after much speculation following various U-turns, newly appointed chancellor, Jeremy Hunt, has announced that the planned IR35 repeal will, in fact, no longer take place.
Andy Vessey, head of tax for Kingsbridge Contractor Insurance said, “This is a major blow for recruiters and contractors alike. Hunt has torn up virtually all the tax measures announced in the mini-Budget, as the government now dances to the tune of the markets. I applauded many of those tax announcements, none more so than this repeal.”
He continued, “SMEs are the backbone of the UK’s economy and the IR35 off-payroll reform is an obstacle to economic growth. Self-employed contractors feel they have been unfairly treated under the current rules, and many end clients have avoided engaging with contractors since its inception.” Andy concluded, “The current IR35 rules are likely to stay for the foreseeable future, so if businesses want to stay competitive, they should be embracing contractors, rather than ignoring this pool of talent, it will be far more beneficial in the long run”.