IR35 reforms to be repealed in 2023
The 2017 and 2021 reforms to IR35 will be repealed from 6th April 2023.
From then, workers from across the UK providing their services via an intermediary will be responsible for determining their employment status, and for paying the appropriate amount of tax and National Insurance contributions.
The chancellor, Kswasi Kwarteng, explained that the reforms to off-payroll working have added ‘unnecessary complexity and cost’ for businesses, and that the changes will simplify IR35 rules.
Mark Wilcock, Managing Director of Westlakes Recruit, said: “We greatly welcome the step taken by the chancellor to repeal the IR35 reforms of 2017 and 2021.
“The reforms of 2017 and 2021 put an undue burden on businesses, introducing unnecessary complexity into the process of engaging with PSC’s and taking money out of the pockets of hard-working people. Given the crisis the country is facing, it is vital that doing business is made as easy as possible.
“The UK has a highly skilled contingent workforce which can offer vital flexibility to the mission critical programmes across the nuclear sector. We are delighted that the sector can now benefit by engaging with this capability in a more efficient manner.”
Paul Havenhand, CEO of Kingsbridge, contractor and freelance insurance specialists, also welcomed the decision: “This broadly unexpected U-turn on the 2017 and 2021 off payroll changes is a real boost to the UK’s contingent workforce.
“Contractors have had a tough few years with limited furlough support and restrictive blanket bans following Government changes to off payroll.
“These changes will inevitably result in an increase in contracting roles and give greater choice for the contractor community to operate under a business model which is right for them.
“More than ever, it is important that contractors assess their status and put the right protections in place for their business.”
For services provided before the 6th April 2023, the current rules will still apply.
This will also be the case if payment for these services is made on or after 6th April 2023.
Essentially, the government aims to abolish the 2017 and 2021 reforms, rather than scrapping IR35 rules altogether.
To view The Growth Plan 2022, visit: The Growth Plan 2022 (HTML) - GOV.UK (www.gov.uk)