When the Autumn 2017 budget was released, Chancellor Phillip Hammond confirmed that there will be no further budget announcement in the Spring of 2018, as was the case in 2017.
Instead, a ‘Spring Statement’ will be released on 13 March 2018. This is to help keep things simple for taxpayers and businesses, and will not be a ‘fiscal event’ according to Hammond.
This statement provides the perfect opportunity for the government to respond to the investigations and consultations it will have done by that time into IR35 in the private sector.
As part of the Budget announcement, Hammond said that a consultation would be conducted around IR35 in the private sector. This something that wasn’t carried out before the reforms were implemented into the public sector. The problems the reforms have caused in the public sector are by now well known.
By the time March 2018 comes around, the findings of this consultation will have been assembled. One thing contractors will be certain to look out for therefore is the response of Hammond and HMRC to what the consultation indicates, and what that might mean in terms of IR35 in the private sector.
HMRC has also commissioned independent research on the impact of the IR35 changes in the public sector. This could be a crucial factor, as the business and economic repercussions of the reforms will no doubt be highlighted.
Were a similar move to come to the private sector, many predict the damage would be far worse.
It’s generally thought that HMRC will take heed from the ramifications of the public sector reforms. Certainly, the fact that a consultation process is in place at all is a positive step. Noises in the industry indicate that extending the reforms is one option of many, rather than a dead cert. Alternatives are very much part of the government thoughts, so it is believed.
Whatever the outcome, it seems that next years ‘Spring Statement’ will be a clear indication of government’s intentions. Here’s hoping they are positive for the contractor community, the needs and cares of which have too often been overlooked in the past.