It’s been an eventful few weeks in UK politics and for the UK economy. With the pound struggling against the dollar on the back of the market turbulence caused by the September mini-Budget, action needed to be taken to calm the financial markets.
In a statement made on Monday 17th October, the new Chancellor, Jeremy Hunt, announced that IR35 would not be repealed as was previously announced by his predecessor Kwasi Kwarteng.
It was clear the Chancellor had to do something to calm markets, but the repeal of IR35 could possibly have been kept separate. The U-turn will be viewed as a major blow to contractors and businesses alike, and an already controversial reform has now been thrust back into the spotlight for the wrong reasons.
As a result, it’s ‘as you were’, with medium and large businesses responsible for determining a contractor’s employment status, with those contractors who work for small businesses being responsible for their self-determination.
there is an exemption from the IR35 decision-making for small businesses, as defined by s382(2) of the Companies Act 2006. To be classed as small business, the business must meet at least two of the following:
- Annual turnover of no more than £10.2 million.
- Balance sheet total of no more than £5.1 million.
- No more than 50 employees
Businesses were possibly looking forward to a new era of less responsibility and reduced costs, some may even have started planning for that, but now they face a future where the cost of the complex IR35 reforms will remain, while running costs continue to increase.
To read more about IR35 and your role and responsibility as a contractor, or as a fee-payer / hiring party, visit our online IR35 Hub.
Visit our IR35 Products page to find out how you could protect your business in the event of a IR35 tax investigation.
Related Articles:
Mini-Budget all but reversed, what does it mean for you?
https://www.caunceohara.co.uk/ir35/information/new-ir35-rules-explained/
Sources:
https://www.bbc.co.uk/news/business-63285246
