Freelancers given a year to get used to tax shake-up
The Treasury will not punish freelancers facing tough new tax avoidance measures for any mistakes on their returns for 12 months. With IR35 rules due to come into force on April 6 set to make medium and large businesses responsible for setting the tax status of contractors they hire, Chancellor Rishi Sunak has said that businesses and contractors would not have to pay penalties for errors in compliance in the first 12 months "except in cases of deliberate non-compliance". Julia Kermode, the chief executive of the Freelancer & Contractor Services Association, says that with the general election delaying HMRC's education programme, “a number of businesses are only finding out about the reforms and their new liabilities now, weeks before they take effect." An inniAccounts study looking at the potential impact of the new rules, which are designed to tackle disguised employment, shows that 70% of 350 organisations polled were no longer willing to use contractors.