In an unexpected U-Turn the new Chancellor of the Exchequer, Kwasi Kwarteng, announced today in his mini budget that the Off-Payroll changes brought into the Public Sector in 2017 and later to the Private Sector in 2021 will be scrapped.
The unpopular off-payroll changes forced thousands of contractors to reconsider their future, placing the determination of their contract’s status in the hands of British Business and public sector organisations. The announcement reinstates the contractor with the control and responsibility of determining the tax status of their own assignments and is seen as a victory for common sense.
The reversal of the off-payroll rules will come into effect on 6 April 2023. With many contractors working on 3-6 months assignments we flag that they will need to carefully consider how they transition their contracts and arrangement to ensure they can take full control come the new tax year.
Further good news was also announced with the cut in National Insurance Contributions from this November and cancelling the Health and Social Care Levy. This has been welcomed by Umbrella providers and their contractors. In the words of the Government “These tax cuts will ensure individuals keep more of what they earn, and make the UK a more attractive place to live and work.
After a very difficult period for contractors these announcements will come as a welcome relief and a positive sign of light at the end of the tunnel.
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