The budget delay can lead to more IR35 ‘uncertainty’

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The budget delay can lead to more IR35 'uncertainty'

The budget which was announced to fall on the 6th of November has now been delayed which could have a negative effect and cause more “uncertainty” surrounding IR35.

This is the opinion of Brookson Legal, the only regulation law firm that focuses on IR35. The firm believes that this delay could lead to companies being more complacent in organising their preparations which in turn could result in a “last minute scramble” to make their company IR35 friendly.

Matt Fryer, group compliance director, Brookson Legal, said:

Delaying the budget is bound to cause uncertainty at a time when many businesses have rightly started to make necessary preparations for IR35 changes in April 2020. This decision could spark others to delay their preparation, which itself may well lead to a last minute scramble and inevitably see businesses take knee-jerk decisions which are bad for contractors and bad for the companies themselves.

IR35 is a significant and complicated piece of legislation and unfortunately, the current lack of clarity is unhelpful for the businesses that rely on a flexible workforce and contractors whose livelihoods depend on it.

The budget is being pushed back as the Government and the opposition are currently in disagreement over whether or not to hold a general election.

This follows on from the news that all of the “big four banks” in the UK have decided to stop using contractors in the run up to IR35.

In July 2019, the Royal Bank of Scotland (RBS) implied it would be standing by contractors despite IR35, however, the bank has now reversed this message.

RBS told all “its existing contractors” who work as limited companies they must either transfer to the Pay As You Earn (PAYE) system of paying income tax or umbrella companies by February 28th, 2020.

HSBC was the first out of the “four big banks” to put a stop to contractors in May, followed by Barclays in October, Lloyds a week later and now RBS.

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  1. These kind of articles are currently abounding in the HR press, with the contractor workforce running scared about having to pay tax and NI like the rest of us – putting all manner of obscure and tenuous reasons as to why the gravy train should just keep rolling.
    Another case in point. Quote from the article above “a flexible workforce and contractors whose livelihoods depend on it.” I thought the whole notion was that this workforce worked here and there for occasional projects for a variety of companies on an ad hoc basis and was not over-dependant on any one particular workstream. No-one wants flexibility that much, they want to be sure where their next meal is coming from. Yes, we’d all like to earn a years’ income in 4 months and then take 8 months off – but that’s not the world we live in any more.
    My guess is that the work will still be there, needing to be done – just on a PAYE footing. This is not a question about being ‘out of work’, with the article trying to paint a gloomy picture of the tall dark spectre of ruin stalking our land, but a large proportion of the working population finally contributing to the public services that we all enjoy on an even footing with the rest of us.

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