“We are not continuing with the reversal of off-payroll working reforms”.
In a statement this morning, the Chancellor of the Exchequer Jeremy Hunt has chosen to scrap the plans to repeal the Off-payroll IR35 Reforms, which Kwasi Kwarteng previously announced in his mini-budget on 23rd September 2022.
The Growth Plan had set out steps to take the complexity out of the tax system and identified the necessity of repealing the 2017 and 2021 off-payroll working rules (IR35 Reforms).
The Conservatives Growth plan indicated that repeal would "free up time and money for businesses that engage contractors, that could be put towards other priorities." And that it "also minimises the risk that genuinely self-employed workers are impacted by the underlying off-payroll rules."
The Treasury statement fails to say why they are not continuing with the failed IR35 reforms, and simply alludes to the fact they need the money.
He will provide further detail in a statement to Parliament this afternoon, but the Treasury has confirmed that retaining the rules, along with similar ones for the private sector introduced last year, would save £2bn a year compared with the plan to scrap them.
The proposed change had been welcomed by the Recruitment and Employment Confederation, which represents employment agencies, and the Association of Independent Professionals and the Self Employed, which represents self-employed staff.
The U-turn means that employers will remain responsible for assessing and ensuring that those agency workers who fall within the rules, and provide their services through a company, pay appropriate levels of tax and national insurance.