IR35 reversal shifts decision making from business to workers

Commenting on the reversal of the reforms to the off-payroll working rules – known as IR35 – James Warwick, employment tax partner at Deloitte, said: 

“Today’s announcement effectively shifts the burden of policing compliance around assessing who is deemed as an ‘employee’ from employers, back to HMRC – as individual workers will assess their own status. 

“Individuals who may have felt that they had been unfairly characterised as employees previously, are likely to be pleased to have the opportunity to take their own view of their status from April 2023 and possibly reduce their tax bills. 

“While businesses who have invested significantly in adapting to the previous rules will benefit in the longer-term from reduced red tape, in the short-term they will still have the headache of transitioning their policies. 

“HMRC’s approach to policing the old ruleset will likely have to adapt. It’s possible we may see a reduction in the number of people on UK payrolls from the start of next year and a commensurate increase in the numbers of self-employed workers.”

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