Julia Kermode reacts to today’s Spring Statement

The Chancellor delivered his Spring Statement at lunchtime today. Reacting to what Mr Hammond said, Julia Kermode said:

“The Chancellor told us that today’s Spring Statement would not be a major fiscal event so I am pleased that he has been true to his word. It was a positively upbeat economic forecast by Mr Hammond and it was no surprise that he chose not to use today’s Statement to say anything new about his plans to roll-out IR35 reforms into the private sector. With no mention, we hope that it shows that the Government has listened to FCSA’s many concerns and the impact the changes have had on the public sector over the last year and we will continue to make our voice heard on behalf of the UK’s hard-working contractors and freelancers that a private sector roll-out will be hugely damaging for them and the UK economy.

“Rhetoric from Government suggests that the public-sector changes have seen an increase in compliance and I challenged HMRC on this at the last IR35 Forum meeting. More numbers on the payroll which has seen an increase in tax and NICs into the Treasury’s coffers does not indicate an improvement in compliance but simply that more people are on the payroll. And many have been wrongly put there. It is widely acknowledged that some public-sector employers have taken blanket decisions that have seen genuinely self-employed contractors being pushed onto the payroll inappropriately. These genuine contractors will have overpaid in tax so we will no doubt see a number of them seeking to reclaim their overpayments in due course, but we won’t know the real figures until after January 2019. HMRC representatives did concede my point at the Forum meeting and acknowledged that it was too early to judge the success of the policy thus far. When they do, I think Mr Hammond’s Tigger-like bounce will be quashed.”