With the news that the Government plans to hold an IR35 consultation early next year, any immediate announcement regarding private sector reform has been delayed, much to the relief of the UK business community – who continue to petition against future changes.
The ‘Red Book’ released immediately after The Chancellor’s Budget speech gave details on the Government’s upcoming review into recent public sector reform, in which they will explore the possibility of extending changes into the private sector.
It is widely predicted that any incoming changes would resemble April’s public sector reform. Public sector bodies have now been handed the responsibility of setting the employment status of the contractors they engage – a move which sees them now liable for any missing tax should they be found to have made an inaccurate determination following an IR35 investigation.
Needless to say, changes have been unpopular and impacted public sector contracting. Recent APSCo research suggests that contractor vacancies have declined by as much as 30% in the past year.
In addition to this, contractors face the prospect of being placed inside IR35 inaccurately, which would see them made to pay a similar rate of tax to employees without any of the benefits that employment brings.
Such is the concern regarding private sector reform, leading business voices have urged the Government not to roll out further changes, fearing that the UK’s 5.5m private sector businesses could not cope.
The petition has gathered momentum and at the time of writing has over 12,000 signatures. At 100,000 the issue will be considered for debate in Parliament. You can sign it here.