Chancellor Kwasi Kwarteng (pictured) made commitments to cut back “unnecessary and excessive” regulation in his announcement in Parliament. This included simplifying tax, abolishing the Office of Tax Simplification and improving the UK financial environment for investors, businesses and others, which were at the heart of The Growth Plan revealed by Kwarteng.

“Economic growth is the government’s central mission,” the Growth Plan document says. “To do this, the government must cut taxes, streamline the public sector and liberate the private sector by making Britain the place for investment, skilled employment, infrastructure, home ownership and enterprise.”

The changes to the fiercely debated IR35 regulations outlined in the Growth Plan say the Plan “sets out first steps in taking complexity out of the tax system. The 2017 and 2021 reforms to the off-payroll working rules… will be repealed from 6 April 2023. From this date, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and [National Insurance Contributions]”.

Other highlights with potential impact for recruiters include:

• Annual investment allowance, the amount companies can invest tax free, remains at £1m indefinitely
• Regulations change so pension funds can increase UK investments
• New and start-up companies able to raise up to £250k under a scheme giving tax relief to investors
• Share options for employees doubled from £30k to £60k.

Commenting on the mini-budget, Neil Carberry, CEO of the Recruitment & Employment Confederation, said: “Ditching the botched changes to IR35 – the rules on how temporary contractors are paid – is a huge help.”

However, he went on to say, “It is not enough to simply tear things down though – we also need to build. On IR35, retained European regulation, investment zones and infrastructure there is hard work to do on replacement rules, and in some cases little time to do it.

“Business is ready to help – but we will need action from government to make things happen,” he said.

At the Association of Professional Staffing Companies (APSCo), Tania Bowers, global public policy director, commented: “The planned repeal in April 2023 of the Off-Payroll legislation is a welcome move. APSCo has long called for a review of the measures which have dramatically reduced the flexibility of the skilled independent labour market since they were introduced in 2017 and 2021.”

At accountancy firm HW Fisher, Tim Walford-Fitzgerald, said: “Cutting the red tape around off-payroll working is a huge move by the chancellor, and should help to massively simplify the tax process for businesses and offer greater freedom to contractors. It’s certainly a welcome reversal to a regime that previously led to cautious and time-limited clients making deductions that may have been entirely unwarranted, if truly objective reviews of both contracts and actual practices could have been undertaken.”

Editor’s note: See recruiter.co.uk next week for more insight and information about the changes announced today.

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