Originally written by Anna Jordan on Small Business
The Government has released its Draft Finance Bill, taking a step further in cementing changes proposed in this year’s Spring Statement.
We take a look at the measures which affect freelancers and small businesses.
IR35 to hit freelancers in private sector
The most controversial of the proposals is IR35, also known as ‘off-payroll’. This means that HMRC can tax sole traders if their role is akin to that of a full-time employee. In April 2017, these rules were implemented within the public sector and it looks as if they’re going to be brought in for the private sector from April 2020.
Freelancers are worried as if they’re classified as full-time employed they’ll be hit with PAYE while missing out on vital employment benefits such as sick pay and holiday entitlement.
The Federation of Small Businesses is calling on policymakers to delay implementation. It’s warning that it would be risky to bring in the changes following a sustained period of uncertainty, citing that it’ll cause ‘significant disruption’ to a quarter of a million sole traders.
FSB national chairman, Mike Cherry, labels this as a ‘reckless’ move:
“Left unamended, this bill could easily usher in an environment where firms in need of