IR35 reforms repealed, government confirms

The UK government have decided to reverse IR35 reforms from April 2023

The decision was announced during the government's mini budget announcement on 23rd September 2022.

The IR35 reforms took action in April 2021. This changed the responsibility of determining a worker's employment status from the employee to the employer. The employer also became responsible for all tax and national insurance contributions for self-employed contractors and agency workers.

The reforms were difficult and became a burden for many firms and contractors.

Now, from April 2023, the April 2021 reforms will be reversed and contractors will be responsible for their own tax liability.

What effect does this have?

The undoing of the IR35 reforms will remove the threat of tax liability and burden of compliance risk for businesses.

In turn, this will make the process of hiring agency workers or contractors much easier and businesses can benefit from flexible workforces - which is essential in a time of increasing demand for staff.

The abolition of the reforms will have a huge positive impact on contractors and agency workers, allowing them to access work without unnecessary challenges.

Article by HR Magazine