13 Nov 2019
Next year's expansion of the off-payroll rules into the private sector should be delayed, according to the Federation of Small Businesses (FSB).
In 2017, HMRC introduced new off-payroll rules to the public sector, which saw some contractors' net income cut significantly. HMRC also shifted the responsibility for compliance from the individual contractor to a public body or recruitment agency.
From 6 April 2020, new tax rules will use the 2017 changes as a starting point for the extension to large and medium organisations in the private sector. This would make hiring sole traders less appealing, according to the FSB.
Commenting on the proposals, Mike Cherry, National Chairman of the FSB, said: 'Against such an uncertain backdrop, the self-employed certainly don't need an IR35 rule change that makes hiring contractors less attractive. We've already heard noises from big corporates to indicate that, if this change does take effect in April as planned, they'll pull the plug on sole traders.
'Common sense dictates that a delay to the April roll-out of these rules is now needed.'
In the run-up to the General Election, the FSB is calling on the major political parties to 'reinject optimism into the self-employed community' with their manifesto commitments.
As well as delaying the changes to the off-payroll rules, the business group wants to see tax rises ruled out for the self-employed; a freeze on fuel duty and Insurance Premium Tax (IPT); and more action to combat late payments.