Autumn Statement 2016 – What to Expect

Our managing director John Lyon is looking primarily to the proposed IR35 reforms in tomorrow’s Autumn Statement.

The Autumn Statement is happening from 12:30pm on Wednesday 23rd November 2016, and will be delivered by the new Chancellor of the Exchequer, Philip Hammond. The Autumn Statement is one of the two big economic statements made by the government every year. It will outline Hammond’s priorities for taxes and spending, based on the economic projections provided by the Office for Budget Responsibility (OBR). This will be the first big economic statement since the Brexit vote.

John had this to say:

“The key focus for us, as an accountancy firm which deals largely with personal service companies, are the proposed IR35 reforms. This will potentially have a huge impact on contractors around the UK working within the public sector.

“The IR35 consultation closed in August and the changes are expected to be rolled out in April 2017. The Autumn Statement should confirm what is happening, but then we will all need to be a little patient and wait until December 5 for the exact details of what is planned, as that is when the draft legislation is set to be released.

“Due to the belief that there is widespread non-compliance with the current legislation, going forward determining IR35 will no longer be the responsibility of the Personal Services Company (PSC), i.e. the contractor themselves, but the responsibility of the entity which pays the PSC for engagements within the public sector.

“Although there will be an online tool available to these companies which will lead them to a decision about the IR35 status, there is inevitably the risk that they will naturally err on the side of caution when it comes to making a final decision, as they will want to avoid any possibility of making the wrong call.

“This means that contractors will potentially be worse off, as it might make contracting in the public sector a far less attractive option. It may also be the case that this begins with the public sector and then at a later date they might roll it out into the private sector.“

ICS Managing Director, John Lyon
ICS Managing Director, John Lyon

If you are a contractor working in the public sector and have questions or concerns regarding the proposed IR35 reforms, then feel free to contact ICS for more information regarding your accountancy options as a public sector contractor. We are also on hand to support agencies and their candidates, so do not hesitate to contact us on 0800 195 3750.