The investigation into the effectiveness of IR35 and possibilities for its replacement is still at the forefront of most contractors’ minds. During question time in the House of Commons last week, David Gauke, Treasury Minister, confirmed that the Office of Tax Simplification will have submitted its report to the Chancellor before the Budget next year. This means the future of IR35 will be included in next year’s Budget.
This confirmation came as Mike Freer MP questioned the steps being taken by the government to keep to their promise of simplifying the current taxation system. Mr Gauke responded: “The Government are committed to simplifying the tax system. To help to achieve that, the Government have established the independent Office of Tax Simplification. Business and tax professionals have also consistently pointed to the way in which tax policy is developed, legislated and implemented as a contributing factor to overall complexity. We published a discussion document alongside the June Budget setting out proposals for a new approach to tax policy making.”
Mr Freer then asked specifically about the progress of the OTS investigation into tax reliefs and IR35. Mr Gauke responded: The OTS is looking at two areas. One is reliefs and exemptions, and although the timing of the publication is to be finalised and that is a matter for the OTS, there will be an interim report, I believe in November, on this area. With regard to the reform of small businesses, including IR35, the OTS intends to report in time for the Chancellor to take into account its views in preparation for the Budget.”