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UPDATE: Autumn Budget 2017 confirms IR35 private sector consideration

30 Nov 2017

In a technical statement accompanying the main Autumn Budget the government announced that it has decided to carefully consult on how to tackle non-compliance in the private sector in 2018, drawing on the experience of the public sector reforms and recent external research into modern working practice.

Although this is good news for the short term, it’s now looking more likely that there will be an extension of the rules into the private sector.

According to the Treasury, changes in the IR35 regulations, introduced in April 2017, has improved compliance in the public sector where the burden of responsible for declaring whether contractors are subject to the same tax treatment as permanent employees has moved away from the contractor to public sector body.

Extending these regulations into the private sector will presumably result in private companies having to decide whether a particular contractor or new contract role is within or outside the IR35 regulations on a case by case basis.

Many private sector leaders consider that the legislative changes are a matter of “when” rather than “if” and that this could be the biggest change the temporary labour market has ever seen.

*Autumn Budget: 4.3 Income tax and National Insurance.

Read our latest article on IR35 here.

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