“Contractors will play an essential over the coming months as the cost-of-living crisis continues, with hiring hesitancy seeing a decrease in permanent roles and driving an increase in demand for contractors. To help the self-employed tackle the cost-of-living crisis and support the economy through these challenging times, a number of very practical tax cuts for the self-employed could have a significant impact. These could include revoking the planned hike in corporation tax and reversing Rishi Sunak’s NI increase from earlier in the year, which hits contractors working for umbrella companies twice as hard.
“The Prime Minister has also promised to review the IR35 tax rules for off-payroll workers, but it is unlikely she will reverse the recent changes which make hiring businesses responsible for ensuring tax compliance.
“In the short term, the best we can hope is that a review will encourage HMRC and the Treasury to work more closely with employers and SMEs to provide more focussed guidance on how to successfully navigate the legislation.
“The latest rules have been in place for over a year now and are being actively enforced by HMRC, so it is important for businesses to ensure they are compliant during the rush for contractor talent, regardless of any future changes that may happen.
“In the long term, the new government should consider re-introducing the Employment Bill as a means to address the challenges faced by the flexible workforce and to create a fair and effective legislative framework that will allow businesses to unlock the full potential of the flexible workforce.”
Emergency Budget: Practical tax cuts for the self-employed
Matt Fryer, Managing Director at Brookson Group, a People2.0 company.