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Chancellor may announce demise of IR35

Chancellor George Osborne may sound the death knell for IR35 next week when he announces a new plan that may combine Income Tax with National Insurance.

The chancellor is rumoured to have made up his mind to press forward with the controversial plan, announcing it during next week’s Autumn Statement. Mr Osborne is understood to be poised to reveal what may very well be the most comprehensive plans as yet to combine Pay As You Earn with National Insurance, though industry experts say the two systems will remain separate in the end.

Mr Osborne intimated his plan for combining both PAYE and NI back in March when he delivered his previous budget, when he made a promise to consult on a wide variety of options for how to operate self-employed, employer, and employee NICs. Most industry experts do expect to Mr Osborne reveal that he will keep his vow on 5 December, though many business leaders would rather he instead explore how to combine income tax and NI into one integrated system.

Still, most economic insiders have adopted a ‘wait and see’ approach for next Wednesday, resting assured that the government will deliver proposals in detail at that time or at the very least a detailed analysis of what options are still on the table. Business owners would rather see NI folded into income tax, considering how many view it as a disguised income tax, and that the combination of both taxation systems would reduce administrative costs by a considerable margin.

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