With a little under a month until the Spring Budget on the 15th March, the Prime Minister and Chancellor are facing fresh calls to repeal IR35 reform (also referred to as the off-payroll working rules).
Sir John Redwood – a long-time Conservative MP for Wokingham, Berkshire – is among those urging the cabinet to review and reverse the changes.
Speaking to Sky News on Sunday 12th February, Redwood highlighted his belief that “the self-employed are getting a very bad deal.”
“I think we should reverse the 2017 and 2021 changes to the so-called IR35. We want to promote more self-employment – make it easier for people to get into self-employment. That is the quickest way to expand capacity” he said.
The IR35 legislation was introduced in 2000, with the off-payroll working rules implemented in the public sector in 2017 and the private sector in 2021. When serving as Chancellor, Prime Minister Rishi Sunak oversaw the implementation of IR35 reform in the private sector.
The changes made the end-client responsible for determining IR35 status. Previously, contractors had been responsible – and liable – for assessing if their contract fell inside or outside IR35.
Prior to Rishi Sunak’s tenure, the government led by Liz Truss promised in the mini-Budget that the controversial reform would be repealed in April 2023.
However, following the fallout from Truss’s reign, Chancellor Jeremy Hunt rowed back on this change in a matter of weeks.
As well as urging Sunak and Hunt to repeal IR35 reform, Sir Redwood raised doubts about the effectiveness of the current tax regime.
Referring to the delayed increase to Corporation Tax due to take effect in April this year – rising from 19% to 25% – he called on the government to rethink business taxes.
“I don’t think the Corporation Tax delayed increase will raise the money The Treasury and the OBR think it will,” he said.
“All the evidence is, in the past, when Conservative governments have had the courage to cut the Corporation Tax rate - never a popular move – it raises more money,” Redwood concluded.
Speaking to London Loves Business, Qdos CEO, Seb Maley, said “millions will welcome Sir John Redwood’s comments.”
“Whichever way you look at it, IR35 reform has damaged flexible working in the UK.
“Rishi Sunak himself saw through IR35 reform in the private sector when Chancellor. So he’s no stranger to this legislation, nor the challenges it has created.
“Reversing IR35 reform would be the fair and logical thing to do. However, when it comes to IR35, the government has been anything but fair and logical.”
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