IR35 Decision Delay After Budget Cancelled

IR35 Decision Delay After Budget Cancelled

4 November 2019

The government has scrapped plans to hold a budget in November after MPs voted for a general election in December.

The delay creates more uncertainty about whether planned IR35 reforms will take effect in April 2020.

The Treasury has confirmed that the December 12 election will mean that chancellor Sajid Javid will not deliver a budget that was scheduled for November 6.

Although the budget has been cancelled, it does not necessarily mean that IR35 changes due to take effect in April 2020 will not go ahead.

FCSA CEO Julia Kermode said: “The legislation [to implement the changes to IR35] is drafted, and there needs to be some sort of finance bill so the government can still collect taxes.”

She did concede, however, that the December election and a possible January Brexit deadline date means that it is ‘unlikely’ that there will be a new budget before Spring 2020.

The November budget was initially pencilled in as the government’s ‘post-Brexit statement’ due to be delivered a week after the UK’s planned exit on October 31. 

Mr Javid had said that he would be “setting out our plan to shape the economy for the future and triggering the start of our infrastructure revolution.”

Miles Grady, Director of Umbrella.co.uk, said: “HMRC has already published draft legislation for IR35 reform in the private sector. The changes did look set to affect limited company contractors engaged by large and medium-sized companies from 6 April 2020.

“The decision to cancel the November budget means that some doubt will creep in for contractors and companies. A firm commitment on IR35 seemed all but inevitable in the November budget. If the announcement is delayed and the changes still take effect in April, then there it’s a threat that many will not be ready.”

For more information about IR35 and how it will affect you, speak to a member of the team today. Call: 0800 121 6513.