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Is IR35 going the way of the dodo?

New rumors are swirling that IR35 finally may getting tossed out in the street – but are we throwing the baby out with the bathwater?

I can’t believe I’m saying this, but the newest rumor coming out of Westminster right now that IR35 regulations might be getting dismantled might not be the best news for the contractor community. While disguised employment has been a right pain for all too many of us, and the idea of it going away for good should seem like cause for celebration, the problem here isn’t that it’s going away but what’s rumored to take its place.

So what fresh hell is this that we’re in for? Hold on to your knickers: the new rumor is that, in place of IR35 tests to determine if you’re an employee or not, you’ll simply be made into an employee after a certain amount of time spent working for a particular client. While it seems like more than a bit of over-reaching when it comes to the Government determining your employment status for you, in some situations this could be appropriate, such as when you’ve been working for the same client exclusively for a year or more. But that’s not what’s being planned, according to the rumors coming out of the Treasury – apparently the Chancellor of the Exchequer wants to set the threshold at a single month.

Yes, you read that right. George Osborne in his infinite wisdom wants to forcibly convert you from contractor to an employee if you work for any client for a month or more. Do you feel gutted right now? Because I know I do. So yes, you’re going to have to be responsible for paying National Insurance if you work 32 days or more for the same client, because the Treasury is bleeding money and it needs to plug up the holes with as much cash as possible.

The Government says it’ll make around £400 million more a year in revenues from this “brilliant” plan, and will throw out IR35 regulation as a result, since it won’t be needed anymore since contracting will effectively be a thing of the past. Sure, I suppose you can continue to work for clients as a freelancer as long as you never take a project that lasts more than a month, but that’s no way to live, is it? Honestly, for what it’s worth, I’m tired of the Government making our lives more complex and complicated just in the search for more money for it to mismanage and misspend.

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