The Chancellor has today committed to repealing the Off-payroll legislation, which was rolled out into the public sector in 2017, and the private sector in 2021. The legislation, which was supposed to reform IR35 will no longer apply from April 2023. Instead, the original rules will remain, and contractors will be responsible for assessing their own tax and NIC’s.

Confirmed today in the House of Commons by the Chancellor Kwasi Kwarteng in his first fiscal statement, he said;

“To achieve a simpler system, I will start by removing unnecessary costs for business. We can also simplify the IR35 rules and we will. In practice, reforms to off-payroll working have added unnecessary complexity and cost for many businesses. So as promised, by the prime minister, we will repeal the 2017 and 2021 reforms. Of course, we will continue to keep compliance closely under review”.

As part of his growth plan, the statement reads;

“The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 06^th April 2023. From this date, workers across the UK providing their services via an intermediary, such as a personal service company, will once again be responsible for determining their employment status and paying the appropriate amount of tax and NIC’s”. 

This will be welcome news to many in the contracting market, as Liz Truss and her government have not only kept to their promise, but have gone further by repealing a legislation that has had a damaging effect on contractors and businesses alike. This is a bold move by the chancellor that will remove the somewhat unnecessary and confusing burden for organisations when hiring a worker, a worker who is often brought in for their specialist skills to solve complex issues.

The changes will mean workers will once again be responsible for determining their employment status and paying the appropriate amount of tax and national insurance contributions. This will free up time and money for businesses that engage contractors which the chancellor said could be put towards other priorities. The reform also minimises the risk that genuinely self-employed workers are impacted by the underlying off-payroll rules.

 How compliance to the new legislation will be monitored is yet unknown, but today’s announcement will go a long way to providing the much needed confidence that our new Prime Minister and her government are committed to supporting businesses and injecting growth in to our economy