UK Mini-Budget: IR35 will be repealed from April 2023

Mini-Budget: IR35 will be repealed from April - FTAdviser.com

The 2017 and 2021 reforms to the off payroll working rules - also known as IR35 - were a tax law that required the end client, and not the contractors they hire, to decide if the working relationship resembles a self-employed engagement or employment. 

Under existing rules, the fee-paying party (either the end client or recruitment agency) shoulderd the liability. 

The aim of the reform was to stop the promotion and misselling of disguised remuneration schemes, however the legislation has received criticism.

Kwarteng has repealed these reforms as part of the first steps in taking complexity out of the tax system. 

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.”

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.