Self-employed sector left disappointed after IR35 U-turn

With Jeremy Hunt announcing a massive U-turn on the many promises made during the Mini-budget, scrapping plans to simplify IR35 has been met with great disappointment.

The last few weeks have been quite the whirlwind in the world of politics, however, one of the most disheartening reversals for the self-employed sector has been the scrapping of the rollback of the 2017 and 2021 IR35 rules.

At the time of the Mini-budget announcement, the IPSE praised the government for the IR35 news, describing it as a ‘watershed moment’ – now, it has slammed the government as ‘spineless’ for the decision to repeal.

Commenting yesterday on Jeremy Hunt’s statement, Andy Chamberlain, Director of Policy at IPSE, said, “Today’s announcement will be a huge blow to thousands of self-employed contractors and the businesses they work with. The reforms to IR35 have created a nightmare for businesses seeking to engage talent on a flexible basis, while simultaneously forcing individuals out of business altogether.

“We know that the government is well aware of the problems caused by this damaging legislation – the previous Chancellor said so at the mini-budget and the Prime Minister made it clear during her leadership campaign. Despite this, it has today taken the spineless decision to row back on its promise to repeal the reforms.

“Businesses that were looking forward to an era of less complexity and less cost will have had those hopes dashed today. Our fear is this decision will lead to yet more work being off-shored to other territories and more people being forced to work through unregulated umbrella companies. The supposedly pro-business Conservative government has sent out a clear message today – it does not support people who work for themselves.”

The FCSA stated that whilst recognising that financial stability and market reassurance are the prime goals of Jeremy Hunt’s statement, the proposed off-payroll working rules being scrapped is disappointing.

Chris Bryce, FCSA’s Chief Executive, said, “The scrapping of the rollback of the 2017 and 2021 IR35 rules is disappointing. This will add to the confusion in the contractor marketplace and will also do nothing to improve the agility and flexibility contractors offer UK plc.

“The government realistically had little choice but to dance the Hokey Cokey on Kwasi Kwarteng’s so-called mini-budget. Markets and businesses react badly to uncertainty and steeper borrowing, and I hope that a steadier hand on the tiller will give both the markets and our industry some stability in the medium term.

“What is clear is that Liz Truss’ economic views have been supplanted by Hunt’s and the immediate market reaction indicates that it’s unlikely she’ll be able to credibly speak on fiscal policy for quite a while, if ever.

“As always I, and FCSA, stand ready to work with Jeremy Hunt, the Chancellor, and other ministers towards ensuring finding fully compliant, practical and workable solutions to the issues surrounding contracting and the whole temporary labour market in the UK.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.