Will IR35 be mentioned in the 2021 budget? Brookson Legal comments
Matt Fryer, Head of Legal Services at Brookson Legal comments on whether IR35 will feature in the Spring budget
“It is unlikely that IR35 will be mentioned in Chancellor Sunak’s forthcoming budget. Following a year’s delay due to the COVID-19 pandemic and extensive scrutiny in parliament, the legislation was finalised over the summer and government is now keen to press on with these changes to the off-payroll working rules and avoid further debate.
“I would expect the budget to focus on stimulating short to medium term growth in the economy but this will need to be balanced with a package of future tax raising measures (such as a potential increase in the rate of corporation tax). Perhaps a more important date for the diary regarding future tax reform is 23 March (dubbed “tax day”) when the government will unveil plans for longer term tax policy changes.
“Prior to the April 6th IR35 deadline, businesses have already been provided with a great deal of information to help them manage their new responsibilities to determine and enforce the tax status of contractors. While offering support to ensure compliance, HMRC will now be actively seeking to recoup the £1.2 billion of tax revenue estimated to be generated in the first year. We would strongly advise businesses not to take short-term compliance risks which could result in tax liability being recovered later in the year. There is still time to get this right.”