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Budget and IR35: No news is bad news
by Susie Hughes at 16:34 11/03/20 (Political News)
The Budget dashed any remaining hopes of the freelancer community that there might be a delay or rethink to the much-criticised reforms of IR35 in the public sector.
Following pre-election promises, there was a review of the controversial measures which gave some hope that the Government might reconsider.

However, many thought this was just paying lip-service to election promises - and in effect it resulted in no significant changes.

The Budget was the last hope of many, and, although the Chancellor made no reference to IR35 in his speech, it was tucked away in the small print.

On page 88 of the 125-page Budget report, paragraph 2.178 signalled the end of this particular road for the campaigners.

2.178 Review of changes to the off-payroll working rules (commonly known as IR35) – At Budget 2018 the Government announced that it would reform the off-payroll working rules in the private and third sectors from April 2020. The Government has recently concluded a review of the reform, and is making a number of changes to support its smooth and successful implementation. The Government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced.

Freelancer group, IPSE, thought it was a mixed Budget but overall 'still a gloomy event for most of the self-employed'.

They welcomed the measures to support the self-employed and small businesses through the Coronavirus outbreak. But then noted that just as the Government tried to protect freelancers’ incomes with these measures, 'it destroys their work by forging ahead with the disastrous changes to IR35 despite heavy criticism.'

Chris Bryce of IPSE said: “Despite positive measures to temporarily support the self-employed through the Coronavirus outbreak, what Mr Sunak did not say in his Budget speech was that the Government has confirmed that it will push ahead with the changes to IR35.

“By forging ahead with these disastrous changes, the Government risks hollowing out the UK contracting industry. Already, many companies across the UK have either declared all their contractors ‘inside IR35’ or scrapped their flexible workforce altogether.

“Understandably, contractors are extremely concerned about this. Many we have spoken to are already seeing work dry up almost entirely, and our research shows at least one in three are planning to stop contracting in the UK. This will be catastrophic for the £305bn contracting sector and will do serious harm to the already troubled economy.

“The Government review of IR35 was recklessly inadequate. Conducted in less than two months, it was not even independently chaired, and its recommendations were ultimately little more than superficial tinkering.

“The changes to IR35 will do serious damage to contractors, clients and the wider economy. We continue to urge the government to rethink this legislation and save the contracting sector while it still can.”

Tax specialists Qdos urged businesses to take a measured approach to what it described as 'needless and short-sighted' reform of the off-payroll working rules.

Qdos CEO, Seb Maley, said: “IR35 reform is a needless, short-sighted tax grab from the Government. Given the alarming threat Coronavirus poses to the economy, this is not the time to introduce reform that has the potential to irreversibly damage the UK’s contractor workforce.

"But while these reforms are disruptive, complex and unfair, they can be managed. And the reality is they will be enforced in a matter of weeks. Businesses need to be prepared, pragmatic and ready to make well-informed IR35 decisions.”

Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.

Budget news 2020
For more Budget information relating to freelancers including the controversial IR35 reforms see Shout99's Political News section.

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Susie Hughes © Shout99 2020

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