IR35 reform repeal may be rowed back on -- Mel Stride

Mel Stride has warned that IR35 reform repeal “may” be rowed back on by the government.

The Treasury Select Committee chair said the possible “row back” of the off-payroll rules’ reversal may be made with -- or similar to -- a reinstatement of 2023’s corporation tax rise.

A former Treasury minister, Mr Stride has already been proven correct about the corporation tax increase, since he made his comments to LBC on Thursday night.

'U-turn will only centre on corporation tax'

Speaking on the Andrew Marr Show, the ex-minister said the government’s remedial efforts from Mini-Budget 2022 would “centre on” corporation tax.

On Friday, prime minister Liz Truss said the “legislated increase in the corporation tax rate from April 2023 will go ahead,” not her government's cancellation of it on September 23rd by then-chancellor Kwasi Kwarteng.

In the eyes of the contractor sector, Mr Stride is tainted due to his own decisions at HMT, on the loan charge but also IR35 reform, as the 2017 rules were introduced on his watch.

'What a mess'

Reflecting on IR35 reform repeal now being cited as one area which government may U-turn on, Rebecca Seeley Harris, who was formerly seconded by the Treasury says: “What a mess.”

And Lucy Smith, boss of Clarity Umbrella cautioned that in light of Mr Stride’s comments, contractors should “be careful” about deciding “what to” work through, structure-wise.

“Should we be surprised by anything at the moment, given the [highly volatile] state of affairs?” asked Ms Smith. “I think not.”

'Cautiously welcome no mention of any IR35 reform repeal rollback'

As the PM reneged on her government’s promise to axe next year’s corporation tax increase -- without any IR35 reference -- the FCSA is hopeful that a line may have now been drawn.

“That Ms Truss did not mention…[any] IR35 rollback this afternoon is cautiously welcome”, said the Freelancer & Contractor Services Association  (FCSA), speaking on Friday.

But Chris Bryce of the FCSA reminds that officially, as far as No 10 might be officially concerned, Ms Truss has only ever promised to review IR35.

'Hunt is a wild card on IR35 reform repeal'

A former expert witness to a House of Lords enquiry into IR35, Dr Iain Campbell, hopes that Mr Kwarteng’s repeal-announcement is honoured, instead of the PM’s review-pledge.

“Whilst Jeremy Hunt becoming chancellor introduces a significant wild card element to IR35 reform repeal, hopefully things will go ahead as proposed,” posted Dr Campbell, the ex-general secretary of the Independent Health Professionals Association (IHPA).

He added: “We will certainly want to see what is actually enacted. [But] given the change of chancellor [from Mr Kwarteng to Mr Hunt], we should be wary of counting our chickens before they hatch.”

'Can we PLEASE just stick to Chapter 8, to stop the dance'

Fatigued from policy back and forths since Mini-Budget, and hoping too that the revoking of the off-payroll rules rather than a review goes ahead, is recruitment risk adviser Jeni Howard.

Compliance director at Evolution Recruitment Solutions, an exasperated Ms Howard appealed: “How is it we see [government] commitments over and over to do a 'review' and [then] IR35 [just somehow] gets scrapped? 

“[I’m not quite sure myself] but PLEASE can we just stick with it now? The IR35 ‘will they-won't they’ dance we did for years is exhausting. And unproductive. Let's stick with Chapter 8 and let HMRC enforce it.”

'Row back on IR35'

On LBC’s The Andrew Marr Show, Mr Stride said [at approx. 6:15]: “So I think it’s going to centre on corporation tax. There may be something on IR35; something called IR35. They may row back on that.”

A director of consulting is hoping that the former financial secretary to the Treasury doesn’t have chancellor Hunt’s ear.

“Mel Stride has history on both IR35 and the loan charge so it isn’t good news if he’s involved [in talks with No 11],” the director warned online. “He deliberately doesn’t get it.”