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Jeremy Hunt has scrapped plans to reform off-payroll working rules (IR35) days after replacing Kwasi Kwarteng as Chancellor.
IR35 rules apply to contractors that operate through a limited company. Currently, a contractor’s IR35 status is assessed by the contractor’s client, but Kwasi Kwarteng’s now infamous mini-budget included plans for contractors to determine their own IR35 status from April 2023.
Rishi Sunak’s pared back Spring Statement contained only small crumbs of comfort for contractors and umbrella company workers.
A £3,000 increase in the threshold at which you start paying National Insurance (NI) contributions will help some low-earning employees. For many, however, this benefit will only slightly outweigh the simultaneous NI increase of 1.25%, and for some workers will only serve to reduce the loss.
The Chancellor’s £30bn plan to protect jobs and boost the economy in the wake of the coronavirus outbreak doesn’t include everything on contractor’s wishlist, but some of the measures will be welcome.
The ‘mini budget’ includes plans to reward employers that bring back furloughed workers, increase the threshold on stamp duty and cut VAT in some key at-risk sectors.
Last week, we covered some of the biggest Budget announcements and how they would affect contractors. This included a big change to private sector IR35 rules and other smaller changes to tax and spending.
Buried a little deeper in the Chancellor’s Budget statement, we uncovered one more change that pushes HMRC further up the payment pecking order when a business goes insolvent.
Chancellor Philip Hammond has been forced to make a ‘screeching’ U-turn on National Insurance contributions (NICs) for the self-employed.
In his budget statement last week, the Chancellor said that he wanted to increase Class 4 NICs, which are only paid by self-employed workers, by two pence in the pound in 2019.
Following heavy criticism from Tory backbenchers, the media and the self-employed community, the Chancellor has dropped this policy.
The SNP leader in Westminster Angus Robertson called it a “screeching” U-turn while Labour said the move was “humiliating”.
Liz Truss’ new Chancellor Kwasi Kwarteng dropped an IR35 bombshell today, announcing he would reverse off-payroll (IR35) reforms in the Public and Private sectors from April 2023.
The significant, and generally unexpected announcement means it will be up to individual contractors to decide whether they are inside or outside IR35, with no input from their clients.
Kwarteng said reversing the reforms is aimed at taking complexity out of the tax system.
The Chancellor Rishi Sunak is thought to be considering a sharp increase in the rate of corporation tax, as the Treasury attempts to curb borrowing in the wake of the coronavirus pandemic.
Reports suggest that the tax, which is paid on the profits of limited companies, could gradually increase from 19% to as much as 25% by the end of the current parliamentary term.
The Chancellor Philip Hammond delivered his annual Spring Statement on Wednesday, providing an update on the state of the economy and announcing several minor policy updates.
Although the Spring Statement doesn’t have the kind of wholesale policy announcements that are characteristic of the Autumn Budget, the Chancellor did have some important news for contractors and professional employment service providers.
Here’s a quick breakdown of the most important issues for the sector.
In amongst the Britain’s Got Talent audition that the chancellor took part in yesterday were some announcements regarding the economy and some good news for contractors. We won’t repeat his numerous Christmas Cracker jokes but here’s the 5 key takeaways for contractors;
The Chancellors fourth Budget in 12 months arrived on Wednesday and it confirmed a number of policy changes that we already knew were going to arrive. Restrictions on Travel and Subsistence tax relief for IR35 contractors and changes to the dividend tax will take effect as planned in April.
The most significant new announcement will be of concern to contractors working through a personal service company (PSC) in the public sector.
An HMRC policy document reveals that from April 2017, public sector organisations will be responsible for enforcing IR35. This marks a significant change from the current system, whereby the PSC or agency judges whether a contractor is caught out by IR35.
Effectively, this means that many more public sector contractors will fall under the remit of IR35 legislation and will receive less take home pay as a result. This change is scheduled to take effect in April 2017 following a consultation.
