The new Chancellor of the Exchequer, Rishi Sunak, has been welcomed into his role by IR35 specialists who immediately advised him to stop the roll-out of IR35 reform on 6th April.
Having succeeded Sajid Javid, who unexpectedly resigned last week as part of the cabinet reshuffle, Mr Sunak has taken up his new position with less than a month until the Budget on 11th March.
With the final IR35 legislation expected to be published on this date, sector experts were quick to call on the Chancellor to halt further changes to the legislation which will see contractors lose the right to set their own IR35 status in the private sector unless they are engaged by a ‘small’ company.
Last month, the previous Chancellor, Sajid Javid, was heavily criticised for launching what was described as an “inadequate” IR35 review. Upon being appointed as Mr Javid’s successor, Mr Sunak was told to learn from his predecessor’s mistakes. Qdos CEO, Seb Maley said: “With IR35 reform rapidly approaching, it’s vital that Rishi Sunak succeeds where Sajid Javid failed. We urge the new Chancellor to act immediately and halt the introduction of needless and short-sighted changes to the off-payroll working rules.”
This was a sentiment that Tania Bowers, Legal Counsel at staffing body, APSCo, also shared: “APSCo maintains that implementation should, at least, be delayed pending a further impact review and completion of an assessment on employment status.”
The threat IR35 reform poses to UK contractors is one thing, but the wider impact of the changes must also be considered by the new Chancellor, explained APSCo’s Bowers: “The UK labour market is currently ranked fourth for competitiveness globally and is one of the best recognised in the world. However, the roll-out of IR35 in the private sector has the potential to not only impact those individuals who have the entrepreneurial spirit to assume the risks and burdens of self-employment, but also those sectors of the economy which rely most heavily on independent contractors, such as banking, pharmaceuticals and technology.”
As Chief Secretary to the Treasury before his appointment as Chancellor, APSCo hope that “this fact will resonate” with Mr Sunak, “particularly given his strong background in business and finance.”
Whether a new Chancellor marks fresh hope for a change of heart from the Government remains to be seen. Certainly, independent workers shouldn’t assume this will be the case, explained Qdos CEO, Maley: “Contractors and private sector firms cannot hang their hopes on a last-minute rethink, even if scrapping IR35 reform is the sensible thing to do. Businesses must work off the basis that changes will be enforced and should continue their preparations.”
With the findings from the Government’s IR35 review due to be published this month, the Chancellor is likely to face increasing pressure to delay the changes. Meanwhile, more than 300 protestors gathered outside Parliament last week as part of the Stop the off-payroll tax campaign.