Ahead of the Mini Budget, which will be announced today, HRreview has gathered recommendations from leading experts outlining what the government must focus on in this upcoming event.
Tax avoidance schemes
Founder of umbrella payroll software provider, Payepass, Fred Dures, has urged the Chancellor to provide further funding to stop the proliferation of tax avoidance schemes, which pose a major threat to contractors, recruitment agencies and businesses engaging these workers:
“A major issue for this government is to stop the proliferation of tax avoidance schemes, which continue to pose a major threat to contractors, along with recruitment agencies and end-clients. This could be solved in part by regulating the umbrella industry, but it seems unlikely that regulation which, despite already being promised, will materialise for at least another year or two.
“In the interim, if the mini Budget was to announce additional funding for the short-staffed Employment Agencies Standards Inspectorate – which forms part of the department for Business, Energy and Industrial Strategy (BEIS) – it could make a big difference.
“As would minor amendments to the Conduct of Employment Agencies and Employment Business Regulations 2003, which would go a long way in preventing tax avoidance schemes from operating and in turn, protect temporary workers and the wider supply chain.”
What about IR35?
IR35 specialist and tax insurance provider, Qdos’, CEO, Seb Maley, commented:
“The Prime Minister has an opportunity to set the tone and start as she means to go on. Make no mistake, in recent years freelancers, contractors and the wider self-employed population have been let down by governments and hit with a raft of short-sighted tax changes – whether that’s IR35 reform, the National Insurance increase or the rapidly approaching Corporation Tax hike.
“Liz Truss has vowed to review IR35 – something which we hope the new Chancellor will shed light on in the Mini Budget. Although, I should stress that yet another review which amounts to nothing simply won’t cut it.
“The hopes of many freelancers and contractors will be resting on Liz Truss to deliver on her promises to cut and rethink the taxes that continue to pose a considerable threat to this vital sector of the labour market.”
Richard Godmon, tax partner at Menzies LLP, said:
“The repealing of the 2017 and 2021 IR35 changes will be hugely welcomed as it will remove an administrative burden, risk and cost, enabling businesses to devote resources to furthering their growth strategies.
“It is important to recognise that IR35 has not been abolished and the result of the changes is that the risk and compliance costs are being returned to the individuals and their personal service companies. HMRC will no doubt redirect their focus towards the contractors, which will bring challenges and make enforcement more difficult.”
Julia Kermode, founder of IWORK, an organisation that champions independent workers, commented:
“The government must remember that the very smallest businesses are self-employed individuals – one-person businesses – who need support as they battle with the double-whammy of the cost of living crisis, which many are struggling with, both on a personal and business level.
“The Chancellor mustn’t forget that self-employed workers have just emerged from a pandemic, during which millions received no financial help from the government. Now, after years of unprecedented challenges, these vital businesses find themselves up against soaring inflation and many may not have the cash reserves to draw on to stay afloat.
“Above all else, in this mini Budget the government needs to recognise just how important the self-employed are to the economy and back up words of support with action.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
