Most of the country was left disappointed after Jeremy Hunt’s statement yesterday, with the IR35 U-turn an additional blow to the UK’s contracting sector.
In the Mini-budget, Kwasi Kwarteng stated that IR35 rules would be simplified from the 6th of April 2023 meaning that workers would once again be responsible for determining their own employment status and would therefore pay the correct amount of tax and NICs.
The FCSA say that although it recognises that financial stability and market reassurance are the prime goals of Jeremy Hunt’s statement, reversing the proposed rollback of off-payroll working rules is disheartening.
Chris Bryce, FCSA’s Chief Executive, explained, “The scrapping of the rollback of the 2017 and 2021 IR35 rules is disappointing. This will add to the confusion in the contractor marketplace and will also do nothing to improve the agility and flexibility contractors offer UK plc.
“However, the Chancellor also recognised that re-introducing the 10% rise in National Insurance Contributions dropped by his predecessor, would have been a step too far and, since that tax would have disproportionately affected those working via umbrella companies, I’m pleased that it currently remains off Jeremy Hunt’s agenda.”
Bryce added, “The government realistically had little choice but to dance the Hokey Cokey on Kwasi Kwarteng’s so-called mini-budget. Markets and businesses react badly to uncertainty and steeper borrowing, and I hope that a steadier hand on the tiller will give both the markets and our industry some stability in the medium term.
“What is clear is that Liz Truss’ economic views have been supplanted by Hunt’s and the immediate market reaction indicates that it’s unlikely she’ll be able to credibly speak on fiscal policy for quite a while, if ever.
“As always I, and FCSA, stand ready to work with Jeremy Hunt, the Chancellor, and other ministers towards ensuring finding fully compliant, practical and workable solutions to the issues surrounding contracting and the whole temporary labour market in the UK.”
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