Home Finance IR35: Rishi Sunak's rollout will be 'disastrous for self-employed'

IR35: Rishi Sunak's rollout will be 'disastrous for self-employed'


The Chancellor set out his economic plan for the UK today as the economy continues to struggle. New support measures were announced for a wide range of people, with the hospitality sector’s five percent reduced rate of VAT extended for a further six months. The suspension of stamp duty on property sales up to £500,000 has been extended, and £700million will go to backing the arts, culture and sporting institutions as they reopen. Another important announcement came for the self-employed, as Chancellor Sunak announced the Self-Employment Income Support Scheme (SEISS) measure will be made more accessible.

This will mean for 600,000 independent workers the fourth and fifth SEISS grants will be more accessible.

The news will be welcomed by many, but Director of Policy at The Association of Independent Professionals and the Self-Employed (IPSE), Andy Chamberlain, tells Express.co.uk that another policy will be “disastrous” for the self-employed.

HMRC confirmed in February that changes to IR35 will come into effect in April despite widespread calls for the policy to be pushed back to a later date.

The reform is designed to ensure private sector employers are responsible for assessing whether or not contractors need to pay income tax and national insurance contributions.

It is also aimed at preventing tax avoidance by “disguised employees” – contractors with permanent positions at companies without paying the same tax or national insurance as standard employees.

However, some self-employed workers fear that the changes will see the private sector take a risk averse strategy and wrongly place contractors under the regulations.

Mr Chamberlain told Express.co.uk following the Budget announcement: “We remain convinced that the IR35 changes that will be implemented will have a disastrous impact on business.

“Not just the self-employed themselves, but also on their clients and the wider economy.

“We have urged the Government repeatedly to reconsider these measures – therefore there was a little bit of hope that we might hear good news in the Budget today – but we didn’t, which wasn’t entirely surprising.

READ MORE: Sunak’s IR35 plan will be ‘double whammy of pain’ for self-employed

“We are very pleased to hear that the so-called newly self-employed will finally be allowed into the scheme and make use of the next two grants.

“However, it remains the case that there are well over a million self-employed people who remain without support and have never had adequate support since the start of the pandemic.

“One particular group are limited company directors – they remain excluded from SEISS, so we are disappointed that we didn’t hear what more could be done for them in this Budget.”


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