So, the new Chancellor's announcement about the IR35 repeal caught everyone unawares, as it’s virtually unheard of to repeal a piece of primary tax legislation without prior consultation.
I’m not knocking-it though; fewer rules about tax has got to be a good thing. Unfortunately it looks like the plan is to roll back the legislation to its original form rather than repeal it completely: this is a benefit to public bodies and large companies (quantified as companies who meet two out of three criteria – turnover greater than £10.2M, balance sheet greater than £5.1M or more than 50 employees) so in reality, nothing has changed for small to medium contractors – the test has always been one for the individual contractor who has his own company to pass, not his client.
Is the IR35 repeal a reaction to a recent case?
It wouldn’t be too large a leap of imagination to think that the IR35 repeal was not caused, in some ways at least, by HMRC’s recent major setback in the appeal court decision regarding the Atholl House case, in other words the TV presenter Kaye Adams.
In simple terms HMRC’s case had relied on them, in effect, re-writing the case law regarding the fundamental tests for employment: the Appeal Court judges were having none of it, and sent HMRC packing. Unfortunately, HMRC have not, as yet, fully conceded the case: poor old Kay must continue to self fund her defence whilst HMRC use the public purse to pursue what to most people looks like a busted flush!!
If you need advice regarding your self-employed workforce contact Nick or Colette for advice today.
info@eebs.co.uk or call 01245 493832.
