UPDATED - Oct 2022
This is now been reversed therefore the reforms to IR35 still stand.
Has IR35 been repealed?
The short answer is yes. In the mini budget announced by Chancellor Kwasi Kwarteng on 23rd September 2022, the government announced that from April 2023 IR35 has been repealed, or more specifically the reforms have been repealed.
IR35 reforms, which came into effect in April 2021 made employers responsible for assessing workers' employment status, and therefore handling all tax and national insurance (NI) contributions for self-employed contractors and agency workers.
This reform switched the responsibility from the contractor to the employer.
The changes in repealing IR35 might just be some of the most pro-contracting that we have ever had in the UK, certainly in living memory.
What we'll need next is a roadmap on how this will work in practice, as the last thing that business needs right now is further uncertainty and red tape.
Additional announcements in the mini budget for business owners are:
- The recent rise in National Insurance tax will be reversed from 6 November
- The planned rise in corporation tax from 19% to 25% has been cancelled
- Income tax will be cut to 19% from April next year - however it's important to remember that Income Tax is a devolved tax therefore this does not apply in Scotland
- The 45% top rate of tax for higher earners abolished. Again as a devolved tax this does not apply in Scotland.
Overall, it estimates that the changes will cost about an extra £12bn this year, £37bn next year and £38bn the year after that.