Budget 2018 is set for Monday 29th October at 3.30pm, which will see Chancellor Philip Hammond announce the government’s plans for spending and taxation.

This Budget is uniquely important as it will be the last one before the axe falls on the UK’s membership of the EU, the official Brexit date being 29th March 2019.

But for recruiters and contractors, there is just one question on everybody’s lips – will there be an announcement about extending IR35 rules for off-payroll working to the private sector?

Is it a done deal?

A roll out of reforms to the private sector is widely considered to be a case of “if not when”, particularly given the government’s view that a similar move in the public sector has been hugely successful, netting the treasury an extra £410 million in tax (HMRC estimate.)

Indeed, government rhetoric on the subject has conveniently brushed over the chaotic implementation of the rules in the public sector and the disruptive impact on public sector bodies, recruitment agencies and contractors.

Calls for deferment

Business and contractor groups are almost unanimous in their view that a 2019 roll out of the rules could be extremely damaging.

Andy Chamberlain of The Association of Independent Professional and the Self-employed (IPSE) said:

“Businesses will not be ready to implement such a measure in April 2019. If the chancellor does push ahead with this, he will be flying in the face of the very businesses he pledged to support less than two weeks ago at the Conservative Party conference.”

The fact remains that the Prime Minister has pledged an extra £20bn for the NHS by 2023 and Philip Hammond will be under pressure to find that money somewhere.

Extending IR35 to the private sector will be seen by government as an easy tax win and politically safer than other options, such as a freeze on personal tax allowances.

Watch this space for news on this, and a full overview of Budget 2018.