Contractor sector awaits Mini-Budget on September 23rd

Emergency Budget 2022 has been informally rechristened ‘Mini-Budget 2022’ and is now expected on Friday September 23rd.

The fiscal event (as it is also being called) was initially expected on September 21st after the date was specified in a letter to the OBR by the Treasury Select Committee.

But since the letter, the death of Queen Elizabeth II saw a suspension of parliament, a 10-day period of national mourning, and a national bank holiday yesterday for the state funeral.

'Budget's relevance to contractors'

That seems to explain why unnamed sources told national press titles that the mini-budget will now be held on Friday September 23rd -- so two days later than initially expected.

Speaking ahead of MPs like chancellor Kwasi Kwarteng officially returning to parliament this Wednesday, Qdos has asked if the Budget will even have “relevance” to contractors.

The question by the IR35 firm is worth asking because some of the big announcements due from Mr Kwarteng aren’t contractor-specific, like the expected price cap on energy bills.  

'All eyes on prime minister Truss'

But in the likely event IR35 isn’t put under instant review, the firm’s Seb Maley says contractors could at least get “further information” on prime minister Lizz Truss’s big pledge.

“All eyes will be on the new PM to see if she delivers on [her] promises,” said IR35 contract reviewer Mr Maley, alluding to IR35 but also potentially to her vow to reverse the NICs hike.

Responding online to Qdos’s chief executive, a test analyst said any meaningful change to the off-payroll rules is wishful thinking.

'All fine and dandy'

“They'll do nothing with IR35. If a review happens it'll be another Treasury or HMRC review,” the analyst wrote. “And then the outcome will be ‘it’s all fine and dandy.’”

A former tax inspector who now advises the private sector on employment status is more optimistic, saying the chance of meaningful look at IR35 is greater due to a personnel change.  

“Lucy Frazer at HM Treasury as the financial secretary is no more. Her replacement [Andrew Griffith MP] is clearly very business-orientated,” the ex-tax official told ContractorUK.

“So it could be good news for the promised IR35 review. My view is that Ms Frazer tended to trot out the HMRC/HMT view, almost as if reading from a script written by others.”

'IR35 rules being actively enforced by HMRC'

Yet it is unlikely that any IR35 review will result in the reformed Intermediaries legislation of 2017/2021 being reversed, according to contractor accountancy firm Brookson.

“The latest rules have been in place for over a year now and are being actively enforced by HMRC”, says the firm’s managing director Matt Fryer.

“The best we can hope is that a review will encourage HMRC and the Treasury to work more closely with…[engagers] to provide more focussed guidance on how to successfully navigate the legislation.”

'We'll see about the Truss-promised IR35 review'

Another contractor accountant unconvinced the contractor sector should expect reform of the off-payroll rules on Friday September 23rd is Chris James.

In a post about the prospect of firstly Ms Truss keeping her promise and then acting on it in a meaningful way, a sceptical Mr James offered just two words: “We’ll see.”

Much more likely is the planned corporation tax increase of 2023 being cancelled, in what would be a respite for contractor limited companies with profits over £50,000.

'Unenviable task for chancellor Kwarteng'

A director at Workwell, Mr James further believes that a cut in VAT stands a chance of being announced, as it would generate the new government some “good  coverage” in the press.

“Whatever action is taken [at the mini-budget],” he said, “even if it's 'short term', there will be long term implications for tax, inflation, credit card debt, house prices -- and almost anything else you can mention. The new PM and chancellor have an unenviable task.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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