Although the Growth Plan 2022, announced on 23 September, set out a number of measures relevant to employers, the recent reversal of several of those measures warrants another look at the current position, as of 2nd November 2022.
One of the main points of which businesses should take note is that the government will now no longer be proceeding with the repeal of the off-payroll working rules (IR35) which was to happen in April. This means that the current position will remain, where payments to workers engaged through personal service companies must be processed by the end-user’s payroll if the engagement is assessed to come within IR35 legislation.
Another key point relevant to employers is that the health and social care levy will no longer be proceeding. This means that the increase of 1.25% in National Insurance contributions that began on 6 April 2022 is going to end and, therefore, from 6 November 2022 the increase will be removed. The prospective introduction of the separate Health and Social Care Levy tax has also been cancelled.
Finally, it seems that the current basic rate of income tax (20%) is going to be retained for the foreseeable future. Although the government still intends to reduce this to 19%, there is no indication of when this will happen or when economic conditions will allow.
Given the current political landscape, it is important for employers to remain up to date on these issues, the details of which continue to be subject to change.
If you would like to discuss anything in this article, or would like guidance from an employment perspective, please contact a member of our team.