Huge boost for self employed as major Tax reform announced by Kwasi Kwarteng in mini Budget. Details here

Chancellor of the Exchequer Kwasi Kwarteng announced the mini-budget on Friday morning, and there’s a lot to celebrate for self-employed individuals. Kwasi Kwarteng announced a major tax shake-up, including the axing of IR35 tax rules starting in April 2023.

The following are the major announcements chancellor Kwasi Kwarteng made in mini budget on Friday morning:

• Cancellation of the proposed beer price rise
• Scrapping of national insurance rise, which would save up to £330/year
• Reductions on income tax from April 1, saving £124/year
• Cuts in stamp duty for first-time buyers and home movers
• Cancellation of the IR35 tax scheme from April

The IR35 tax scheme has been criticised for a long time for being unfair to self-employed individuals registered as private companies. These individuals include building contractors, delivery drivers, and freelance agents who work with businesses without being on the payroll.


The controversial tax scheme classified the tax status of such individuals based on the businesses they provided their services to rather than themselves. This resulted in self-employed individuals incurring extra and unnecessary costs. Experts have hit out at the government for the scheme, claiming it hurt contractors and discouraged employers from hiring freelancers due to additional tax bills.




The chancellor assured that the government would be simplifying the IR35 rules and bringing reforms to benefit off-payroll workers. Further, Kwarteng confirmed that the government would repeal the provisions added in 2017 and 2021, which made 1R35 so controversial. Following the announcement, stakeholders have welcomed the reforms, describing them as a victory for independent contractors. Seb Maley, chief of IR35 advisor consultancy Qdos, said that hundreds of thousands of self-employed individuals were adversely affected by the provision brought earlier.

Apart from the IR35 tax scheme, the government also decided to cancel another controversial proposal, the 1.25% increase in the National Insurance scheme from November 6. The hike was proposed in April 2022, which took the existing rate to 13.25%. The cancellation will allow workers to save up to £135 in the current year and up to £330 in the following year.

FAQS

1. Who is the Chancellor of the Exchequer?
   Kwasi Kwarteng is the Chancellor of the Exchequer in the UK.
2. When was the mini budget announced?
   The UK mini-budget was announced on Friday.