IR35
  • Publish Date: Posted 6 months ago
  • Author:by Katie Ball

Mini-Budget announces IR35 Off Payroll Reform Repeal

​The mini-budget released at the end of last week included a surprise statement from the Chancellor, Kwasi Kwarteng, stating that the 2017 and 2021 IR35 reforms will be repealed from 6th April 2023.In our last blog post, we noted that Liz Truss had promised a review of the IR35 legislation if she became Prime Minister, which she has absolutely delivered on, and some!This will be welcome news for contractors, recruitment businesses and client’s alike, as this now releases the risk from the fee-payer in the chain, which caused many clients to act with a high level of caution with many choosing to blanket rule inside IR35 (which goes against the legislation, as this fails to show that ‘reasonable care' had been taken to determine the result) or to cease using contractors altogether. Many were skeptical of the promised IR35 Repeal review – and whether this would come to fruition or if this was an empty promise. When Kwarteng announced the U-turn in Friday’s mini-budget he 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.”When the new rules come back into effect on 6th April 2023, it will mean that the responsibility of determining a contractor’s IR35 status will revert back to the contractor, along with the tax liability, as it had been for the 20 years previous to the initial reforms in 2017 and 2021.This will now give contractors and clients renewed confidence in contracting again, which will bring a shift in the market, both in the public and private sectors. This will likely mean many contractors will come back out of permanent roles and re-enter the contractor market, and clients will be much more willing to work with contractors again. However, it is worth noting that the current rules will remain in place until 6th April 2023 and we will continue to ensure compliance is maintained in line with the current legislation until then. Compliance will continue to be kept under review, meaning that the HMRC will continue to investigate for any non-conformities with clients and recruitment businesses, which means we must continue to be compliant. This also means that contractors should continue to protect themselves with appropriate contract terms, working practices, and IR35 insurance. Even though the IR35 Reform Repeal has been promised from April next year, it is still important that good working practices from both clients and contractors continue to take place to limit any tax liability in the event of any investigation by the HMRC. This announcement is ultimately good news for the contracting industry, and we will continue to be here to support both contractors and clients throughout the process. If you have any queries, please do not hesitate to contact us.

Share this Article
Back to Blogs

The mini-budget released at the end of last week included a surprise statement from the Chancellor, Kwasi Kwarteng, stating that the 2017 and 2021 IR35 reforms will be repealed from 6th April 2023.

In our last blog post, we noted that Liz Truss had promised a review of the IR35 legislation if she became Prime Minister, which she has absolutely delivered on, and some!

This will be welcome news for contractors, recruitment businesses and client’s alike, as this now releases the risk from the fee-payer in the chain, which caused many clients to act with a high level of caution with many choosing to blanket rule inside IR35 (which goes against the legislation, as this fails to show that ‘reasonable care' had been taken to determine the result) or to cease using contractors altogether.

Many were skeptical of the promised IR35 Repeal review – and whether this would come to fruition or if this was an empty promise. When Kwarteng announced the U-turn in Friday’s mini-budget he 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.”

When the new rules come back into effect on 6th April 2023, it will mean that the responsibility of determining a contractor’s IR35 status will revert back to the contractor, along with the tax liability, as it had been for the 20 years previous to the initial reforms in 2017 and 2021.

This will now give contractors and clients renewed confidence in contracting again, which will bring a shift in the market, both in the public and private sectors. This will likely mean many contractors will come back out of permanent roles and re-enter the contractor market, and clients will be much more willing to work with contractors again.

However, it is worth noting that the current rules will remain in place until 6th April 2023 and we will continue to ensure compliance is maintained in line with the current legislation until then. Compliance will continue to be kept under review, meaning that the HMRC will continue to investigate for any non-conformities with clients and recruitment businesses, which means we must continue to be compliant. This also means that contractors should continue to protect themselves with appropriate contract terms, working practices, and IR35 insurance.

Even though the IR35 Reform Repeal has been promised from April next year, it is still important that good working practices from both clients and contractors continue to take place to limit any tax liability in the event of any investigation by the HMRC.

This announcement is ultimately good news for the contracting industry, and we will continue to be here to support both contractors and clients throughout the process. If you have any queries, please do not hesitate to contact us.

Latest Blogs

View All Blogs
Ux Ui
Five ways your business can benefit from a UI/UX function

​It is important to understand how critical of a role UX and UI design plays in the success of any business. Whether you are launching an app, website, or software interface, you must ensure it is ...

Ai
The future - Robotics Process Automation (RPA) and Artificial Intelligence (AI)

Robotics Process Automation (RPA) and Artificial Intelligence (AI). How do I even begin to describe the monumental impact these technologies are having on the world? They are absolutely key to the...

Ir35
IR35: The likelihood of HMRC investigations

​As we approach two years of working with the Off-Payroll Rules, it’s time for businesses to prepare for the HMRC’s investigations into IR35 compliance. The ‘soft-landing’ period is over, with the...

Psychometric Testing
The Benefits of Psychometric Testing

​Psychometric testing has become increasingly popular in the recruitment process as a tool for measuring the cognitive abilities, personality traits, and job-related skills of job candidates. Psych...

Image Adobe Express
How your HRIS can help with recruitment!

​Human resources information systems (HRIS) have revolutionised the way businesses manage their HR functions. With the help of HRIS, businesses can now streamline their HR processes, manage employe...

Hris
HRIS & HCM Recruitment and Search Specialist: Connecting the Right Candidates with the Right Employers

​Are you looking for the right HRIS/HCM career, or are you a client needing an HRIS/HCM recruitment specialist?With many years of recruitment and search experience with an emphasis on HRIS and HCM,...

Ms Dynamics Blog
Maximise your M365 Environment with In-Demand Talent

​With a market value of $ 2 trillion and 70% of Fortune 500 firms opting to use Microsoft technologies, there is no argument that this colossus dominates the tech industry. Batting off the competit...

M&A
The Insurance M&A Landscape in 2023: What will it look like?

​The Mergers & Acquisitions (M&A) market has been booming in the insurance sector in recent years, many are wondering whether this will continue in a year when a recession is on the horizon.We hav...

Cv Image
8 Tips to make your CV stand out from the crowd

​Your CV is a crucial part of the job application process. It acts as your shop window, highlighting your skills, qualifications, and experiences to potential employers. A well-crafted CV can be...

Law Courts
Getting into a Legal Career - LPC Vs SQE - Which route should you choose?

​Whether you are a current university student, a graduate who has completed their degree already, or someone who is considering a career in the legal industry, then you might be contemplating what...

Contractors
The value in using a Limited Company Contractor

​Despite the ups and downs over the last few months of the IR35 legislation with Kwasi Kwateng announcing a repeal of the Off-Payroll Working rules in September, which was then withdrawn a few shor...

Adobe Stock 203201893
Top tips for retaining your best legal talent

​Retaining good staff is essential for any successful business, especially in the legal profession. With more competition than ever and the increasing pressure on law firms to deliver results, it’s...

ERP Systems
Does your ERP system provide you with a seamless supply chain management process?

​When selecting an Enterprise Resource Planning (ERP) system for your business, it’s imperative that you have optimised your current business processes. This will help you understand the pain point...