IR35 rules fuel crisis in self-employment

It has been suggested that HMRC’s battles with BBC stars over the controversial IR35 rules have contributed to a crisis in self-employment. A survey by the Association of Independent Professionals and the Self-Employed (IPSE) found that one in ten highly skilled freelancers is currently out of work due to the IR35 reforms. More than half of the respondents said they had turned down work because it was deemed “inside IR35″ by a company. The decline in self-employed workers has been significant, with the number dropping from 5m in 2019 to 4.2m in 2022. Analysis suggests that IR35 reforms have cost freelancers £1.5bn in taxes, double the original estimate. Andy Chamberlain of the IPSE said: “Having noted HMRC’s dogged determination to win high profile IR35 battles with TV stars – brushing off successive court defeats in the process – hirers are concluding that working with freelancers risks inviting too much hassle from the taxman.”

The Daily Telegraph

Related Post

Reeves urged to abolish the £175,000 residence nil-rate band The Chancellor is facing pressure to eliminate the £175,000 residence nil-rate band in her upcoming Budget. Rachel Reeves previously argued that this allowance, which costs around £2bn annually, primarily benefits the wealthy and now the Resolution Foundation is pushing her to scrap it. In 2011, she stated: “Raising the inheritance tax limit to £1m for […] By Lisa Brownlow, 18 September 2024
Read Now
Small firms responsible for 80% of tax evasion Analysis by the National Audit Office (NAO) shows that small firms are responsible for more than 80% of tax evasion. The report cites HMRC estimates that £5.5bn was lost to deliberate tax evasion in the 2022/23 financial year, with small businesses responsible for 81% of the total. Despite a reduction in the overall tax gap […] By Lisa Brownlow, 16 September 2024
Read Now
Threshold freeze creates 4.4m more taxpayers The number of people paying income tax has increased by 4.4m in three years due to the freeze on thresholds, according to HMRC data. The figures also show that the decision to freeze the personal threshold at £12,570 has pulled an additional 1.77m pensioners into the income tax bracket. There are currently an estimated 37.4m […] By Lisa Brownlow, 3 July 2024
Read Now
↑