IR35 Reforms – 2022 Sept mini budget

Here is a summary of the reforms from the September mini budget;

  • Rather than reversing IR35 rules as a whole, the new government aims to abolish the reforms of 2017 and 2021.
  • If the reversal goes ahead in April 2023 as planned, self-employed contractors and freelancers who work through their own limited company will once more be responsible for working out their own IR35 status.
  • The reversal is still only a government aim and isn’t yet law. It will need to go through parliament in the usual way, drafted in the next Finance Bill.
  • We have created this content for general information purposes and it should not be taken as advice. Always take professional advice

What is IR35?

  • IR35 is another name for the off-payroll working rules
  • Self-employed IR35 rules are designed to work out whether a contractor is someone who’s genuinely self-employed rather than a ‘disguised’ employee, for the purposes of paying tax.
  • That’s because contractors who set up and work through a limited company enjoy some tax efficiency.
  • While they don’t usually get employee benefits (like holiday and sick pay), they have flexibility and control over their work.
  • When a contractor is a ‘disguised’ employee, they’re taking advantage of the tax efficiency of working through a limited company, but otherwise they should be classed as an employee.
  • ‘Disguised’ arrangements benefit employers too, because they don’t have to pay employers’ National Insurance contributions (NICs) or give any employee benefits to contractors.
  • Smaller businesses are exempt, which means it remains your responsibility to determine your IR35 status when working for them.

What is classed as a smaller business?

End clients are classed as small businesses if they meet two of the following criteria, for two consecutive financial years:

  • annual turnover of no more than £10.2 million
  • balance sheet total of no more than £5.1 million
  • no more than 50 employees

Reference :


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