Just when we all thought things couldn’t get any more complicated with regards British politics, a 12th December General Election has been thrown into the mix. As the news is filled with stories of campaigns, Brexit, and whether or not nativity plays will need to be cancelled, most contractors are wondering what this (and the delayed Budget earlier this month) will mean for April 2020’s IR35 reforms.
Well, the short answer is: absolutely nothing. The long answer is, as with everything, a bit more complex.
Why would the General Election potentially affect the IR35 reforms anyway?
We can understand why a lot of contractors and businesses would be hopeful that the snap election would mean the IR35 reforms would be delayed or cancelled. With no Autumn Budget, the passing of the Finance Bill will likely be moved to the Spring Budget, leaving only a short amount of time before the planned implementation date.
This has led some contractors to believe that there could be a possible delay and that a change of government could result in the plans being scrapped altogether.
However, we would warn contractors to exercise caution and continue to assume that the IR35 reforms will take effect in April 2020. It is highly unlikely that they will be scrapped or even delayed.
Why won’t the General Election affect the IR35 reforms?
First and foremost, the General Election most likely won’t affect the IR35 reforms because the Treasury has said it won’t, with a spokesman saying earlier this month that “we remain committed to introducing the IR35 rules in April 2020”.
This means that the likelihood is – regardless of the outcome of the General Election – the Spring Budget in 2020 will see the required Finance Bill passed and the reforms come into effect as planned.
But what if we wake up to a new government on 13 December? Well, while we could end up with a Labour government, a coalition government, or another hung Parliament, the fact remains that the draft legislation has already been drawn up and, even if there are big changes in the House of Commons, the Treasury staff and civil servants who back the reform and have worked towards it will stay the same. They are unlikely to want to scrap these changes overnight.
What should contractors do now?
At Kingsbridge, our advice is for contractors to assume the IR35 reforms are going ahead regardless and continue to make preparations and familiarise themselves with all aspects of IR35. However, we would also recommend staying up to date with current affairs, particularly around the General Election, party manifestos, and tax so you’re in the loop if anything does change. It’s unlikely to, but the last few years have taught us to never say never.
You can also keep up to date with all things IR35 on our blog.
In the meantime, carry on as normal and watch this space. Oh, and if your contractor insurance is coming up for renewal, you can always get in touch.
