Last week’s Autumn Statement made by Chancellor George Osborne in the House of Commons managed to produce one or two surprises. Osborne abandoned plans to slash Tax Credits and the expected huge cuts to the police budget never materialised. Controversial proposals relating to income tax changes for the self-employed also never got a mention, but whether this is good news for people such as IT contractors is open to debate.

Osborne had been expected to announce changes to IR35 that would have seriously affected the likes of IT contractors who operate as limited companies (or PSCs – personal service companies). It had been feared the changes would see such contractors forced onto a client’s payroll if they had worked for them more than for one month and the ability to claim tax against subsistence and travel would be seriously curtailed.

James Robson in an article in the Brookson website wrote: “George Osborne made no mention of the policy during his hour-long speech on November 25th, which observers took as a sign that it was either never on the table, or had been quietly dropped in response to condemnation from the business community.”

Yet, the author warned the contractor community against such complacency insisting the IR35 reforms are indeed set to go ahead and any new rules could be even tighter.

This sentiment was shared on the ContractorUK website as it was claimed the Treasury said there was still interest in possible changes to IR35.

The only positive spin on the Autumn Statement for those taking on IT jobs as PSCs came from IPSE chief executive Chris Bryce who claimed the Treasury had at least been listening to the organisation and was taking time to find a fairer solution.

Therefore, as far as IT contractors operating as limited companies are concerned it is not yet time to break out the champagne; those IR35 reforms have not gone away.

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