Figures from the UK contracting industry say a “major blow to freelancers and contractors” has been dealt after the government u-turned its decision to repeal changes to the IR35 rules.
Only recently, the UK contracting sector had welcomed the news of the repeal of IR35 reforms which came during the announcement of former Chancellor Kwasi Kwarteng’s mini-budget. However, following Kwarteng’s sacking, newly appointed Chancellor Jeremy Hunt announced that the government will u-turn on the decision, prompting widespread criticism from across the contracting industry.
Fred Dures, founder at umbrella payroll auditing provider, PayePass commented: “IR35 reform has caused unnecessary complexity, leading to major issues for contractors, recruitment agencies and the businesses engaging these workers.”
“By keeping IR35 reform in place and not delivering on promises to regulate the umbrella industry, this see-sawing government is failing the flexible workforce.”
Industry experts believe that the government’s U-turn jeopardises the contracting market and vital supply chains. Seb Maley, CEO of IR35 specialist consultancy firm Qdos said that the move is “the wrong decision at the wrong time”.
“It’s a knee-jerk reaction from the government and, in my opinion, won’t benefit the economy. IR35 reform damages the flexibility of the UK labour market, which is key to economic growth.”
Along with the u-turn on IR35, Jeremy Hunt also unveiled a raft of other changes to the UK tax system, scrapping the vast majority of the new measures which had been announced just weeks earlier in the mini-budget.
Julia Kermode, founder of freelancer support platform IWORK said: “The mini-Budget has been torn up and yet again it will be the self-employed who pay the price. Crippling indecision from this government has left millions of independent workers in limbo, unsure of whether they can pay rent, their mortgages and heating bills.”
