What does the mini-budget mean for employers?

October 5, 2022

By Owen John

The so-called mini-budget caused controversy and panic amongst financial markets, but what does it mean for employment law and HR?

IR35 reforms will be scrapped:

It’s been announced that, from 6 April 2023, the IR35 reforms will be scrapped.

To recap, the IR35 reforms meant that from April 2021, the rules of engaging individuals through personal service companies changed so that much more responsibility was placed on the organisation receiving the individual’s services. What that meant in practice was that an organisation would need to stop and think about whether a contractor should actually be treated as an employee for tax purposes rather than just assume they are contractors. Find out more details about the current IR35 rules here.

However, from 6 April 2023, these reforms will be scrapped.  This means that contractors, will once again be: (a) responsible for determining their employment status for tax purposes, and (b) paying the appropriate amount of income tax and national insurance contributions.

Income tax and National Insurance contributions:

The basic rate of income tax will be cut by 1% from 20% to 19% in April 2023. Also, the previously proposed national insurance increase will be scrapped. The controversial plan to scrap the top rate of tax for the highest earners was reversed shortly after the mini-budget.

Limits on strikes:

After a fairly disruptive summer of train and tube strikes, the Chancellor has proposed new legislation that will ensure that strike action can only be taken if pay offers have been rejected, and not whilst negotiations are ongoing.

Goodbye to all EU law?

A further consideration that links to the mini-budget, the Government published its controversial Retained EU Law Bill. If passed, it will automatically repeal all EU law as at 31 December 2023 unless specific legislation is introduced before then to retain a particular law. This could mean the end, or a significant change to:

  • TUPE;
  • Paid annual leave;
  • The 48-hour cap on a working week;
  • Protection for agency workers; and
  • Protection for part-time and fixed-term workers.

We will be watching developments closely and will update you with what you need to know.

If you need any help or advice on any of the above, please contact Owen John on ojohn@darwingray.com / 02920 829 118 for a free initial chat to see how he can help you. Or fill in our free online contact form.

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