The government has announced a repeal of the off-payroll (IR35) legislation that was rolled out in 2017 (public sector) and 2021 (private sector) – and stakeholders are delighted. This article looks at the FCSA’s response to the mini-budget and the astonishing IR35 development.
The UK’s economy is struggling, and we appear to be heading into a dreaded recession. New Prime Minister Liz Truss is reluctant to discuss the possible recession. Still, the mini-budget that was delivered to the House of Commons on Friday, 23rd September, set out several plans to help support people and businesses through the tough times ahead.
One astonishing announcement was that the government will repeal the off-payroll legislation changes (2017 and 2021) from April 2023 – a move that’s seen to favour the UK’s self-employed. Chancellor Kwasi Kwarteng said:
“To achieve a simpler system, I will start by removing unnecessary costs for business. We can also simplify the IR35 rules and we will. In practice, reforms to off-payroll working have added unnecessary complexity and cost for many businesses.
“So as promised, by the prime minister, we will repeal the 2017 and 2021 reforms. Of course, we will continue to keep compliance closely under review.”
The FCSA’s CEO describes the IR35 repeal as “great news for workers who want to choose their own path”
In a recent article on the FCSA website entitled ‘FCSA’s views on the mini-budget’, Chris Bryce, CEO of the FCSA, shared his views on the IR35 repeal. He said:
“This is great news for those workers who want to choose their own path and at least goes some way to undoing the damage caused by IR35 Mark II. However, it remains to be seen if end-users will rapidly return to engaging contractors via limited companies, with them perhaps waiting to see what the overall market does.
Another issue is that a large number of contractors will be unable to quickly re-establish their businesses having closed them down as a result of the earlier government policy mis-step. There are tight regulations about this, and I strongly advise contractors to get advice from their accountants before they try to move forward.
FCSA does expect to see a movement back from umbrella employment to independent limited companies, but I suspect that this will be gradual rather than speedy. Many FCSA accredited members provide both accountancy and umbrella services and I’ve no doubt that they’re in a great position to advise workers of the best options.”
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