Positive news for contractors as IR35 changes are postponed

As one of the most controversial pieces of legislation affecting the flexible workforce, IR35 is never far from the headlines and usually, the stories are of confusion and consternation amongst those who are concerned about the government’s plans to change the way the rules are applied. The Association of Independent Professionals and the Self Employed has been at the forefront of a number of campaigns to try and ensure that their members are not disadvantaged by the proposed alterations.

This week, IPSE are celebrating the news from HM Revenue and Customs that the department is shelving plans to change the way small businesses are taxed via IR35 in order to ensure that those who work for themselves don’t suffer the significant negative effects that many feared. IPSE have been sitting on the IR35 forum which has been meeting since 2011 to discuss and debate the merits of planned changes to the rules, and on the 15^th December HMRC confirmed to the group that they would not be making any legislative changes for the foreseeable future.

This news has come as a huge relief to contractors and other independent professionals who would have been affected by potential changes, and the fact that the government have said that they want more time to consider their options is another encouraging sign. The department did confirm that they would be redesigning the Employment Status Indicator tool which will help contractors and other flexible workers to ascertain their employment status more effectively. They also reassured contractors that the ESI would remain a voluntary and anonymous test when it is rolled out in 2016, and confirmed that it would not be used on its own to determine a contractor’s status.

Simon McVicker, Director of Policy at IPSE was pleased that the government appear to be willing to listen to those who are likely to be most affected by their plans, and as major campaigners on the issue it has been a relief to them to know that their concerns are being taken on board. They are optimistic that they will be able to work with the government to find a solution which meets the needs of all the interested parties.

Anyone who wants a better understanding of the legislation and how they could be affected can read our guide to IR35 as well as our guide to the advantages and disadvantages of a limited company. For more information about contracting and how best to manage your finances, our FREE 60 page guide to contracting has plenty of useful tips for anyone considering embarking on a career as a contractor.

For more specialist advice on your specific situation, our accountants are always on hand to help, and our low-cost, fixed fee packages mean that you will never need to worry about an unexpected bill. Call us today for more information about how we could save you time and money on 01442 275789 or email newbusiness@sjdaccountancy.com.