Osborne’s Autum Statement: Disaster Averted?

In Osborne’s Autumn Statement: Disaster For Contractors?, I raised a flag about plans, published in a couple of the UK’s national newspapers, to force contractors to join their client’s payroll after just one month, in the pursuit of tax avoidance. (Yes, I know, that one’s contorted, even by Governmental standards.)

Well, these plans were conspicuously absent from the Autumn Statement. I‘ve seen indications that the Chancellor, the Treasury and HMRC were astounded at the push-back from all directions, after the proposals were leaked to several national newspapers.

The nearest that was mentioned in the Statement’s detailed wording was, “The remaining £3 billion is being delivered through reforms such as Making Tax Digital and further measures to tackle tax avoidance.” Bear in mind that HMRC considers all freelance contractors working through a Limited Company (which became necessary when the Government introduced IR35, let’s not forget) to be tax avoiders, and this could still be a bit of a chilling statement.

However — in “Tackling tax avoidance” under section 6.7, there’s not a single word about contractors. In fact, there’s not a single mention of contractors through the whole document, and it was one of the longest Autumn Statements on record.

I think we can consider this a qualified victory — for the battle, if not the campaign overall. As I’ve said before, Britain needs its skilled contractors: as a flexible, disposable workforce to power the development of short-term projects and market experiments; to provide temporary cover for staff absences; to keep the wheels of industry and innovation rolling smoothly.

The ideas that Governmental sources put to those newspapers would have had such a mass of unintended and uniformly negative consequences that I can only hope they’ve been killed, buried with garlic, and a stake hammered hard through their hearts.