Chancellor of the Exchequer says Government no longer plans to repeal IR35

The previous Chancellor, Kwasi Kwarteng, last month (23 September) announced plans to remove IR35, stating that the move would "free up time and money" for businesses and organisations that engage contractors.

Under Kwarteng, the Treasury also said that repealing IR35 – as set out in the Growth Plan – would minimise the risk that genuinely self-employed workers are impacted by the underlying off-payroll rules.

However, in an announcement made today (17 October), Hunt revealed plans to reverse almost all of the tax measures set out in the Growth Plan, less than a month since the plan was presented to Parliament.

According to the announcement, keeping IR35 will cut the cost of the Government's Growth Plan by around £2 billion a year and is part of a range of changes to the budget "designed to ensure the UK's economic stability and provide confidence in the government's commitment to fiscal discipline".

IR35 – also known as the 'off-payroll working rules' – makes sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and National Insurance contributions as employees.

Councils have been tasked with deciding whether the rules applied where they contracted workers who provide services through their own intermediary since 2017.

The move to repeal IR35 was hailed as a "big step in the right direction" by a director at the specialist legal recruitment agency, Sellick.

Adam Carey