IR35 Changes Not Going Ahead

2 months ago by Oliver Atkinson

Changes to IR35 rules, announced by former Chancellor of the Exchequer Kwasi Kwarteng in September, will now no longer be going ahead.

Originally the changes meant that the government was going to completely remove the IR35 rules placed on businesses by closing a tax loophole whereby employees could avoid NI contributions by going self-employed.

Back on the 23rd September, when unveiling the surprise budget, Mr. Kwarteng said that “Reforms to off payroll working have added unnecessary complexity and cost for many businesses”.

But the subsequent economic and political fallout, that brought in new chancellor Jeremy Hunt and saw the value of the pound fall to an unprecedented low, has seen these changes again reversed.

Announcing the changes on the 17th of October 2022 the new chancellor said that they would “provide confidence in the government’s commitment to fiscal discipline”.

Some contractors, self-employed workers and associated organisations reacted with disappointment to the news.

What is IR35?

Under IR35 businesses are responsible for collecting and paying NI and PAYE tax on behalf of contractors, and other self-employed workers, to ensure that workers are roughly paying the same amount of tax as employees. IR35 legalisation was overhaled for all medium and large business inApril 2020.

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