Friday’s “mini-budget” was much more substantial to the contracting world than originally anticipated following two big reversals to IR35 and the Health and Social Care levy.
IR35 Repeal
From April 6th 2023, the Chancellor Kwasi Kwarteng announced that the IR35 reform will be repealed in both the public and private sectors.
Citing the rules as having “added unnecessary complexity and cost for many businesses” the Chancellor went on to announce that “we will repeal the 2017 and 2021 reforms.”
The government’s Growth Plan states: “From this date, workers providing their services via an intermediary will once again be responsible for determining their employment status.
“And [they will be responsible for] paying the appropriate amount tax and National Insurance contributions.
“This will free up time and money for businesses that engage contractors, that could be put towards other priorities.”
Health and Social Care Levy Scrapped
The 1.25 increase % in National Insurance will also be reversed on November 6th, 2022.
The levy, which was introduced following COVID-19 in April of this year, was designed to help raise funds for health and social care, but that will now be achieved through general taxation, the government has said.
What does this mean for your Merit system?
As always, since the announced changes we have started making plans to ensure you remain compliant.
For IR35, the changes will be implemented in our annual Year End Update, with more details to follow closer to April 2023.
An update will also be released prior to November 6th this year to ensure that all National Insurance requirements and thresholds are met.
If you have any questions please just contact us at support@meritsoftware.co.uk