Whatever else you might want to say about Kwasi Kwarteng’s Mini-Budget, it did contain some useful reforms that would have helped UK businesses during this difficult time. Scrapping the IR35 reforms was one of these measures. In the construction sector at any rate, it would have reduced red tape and helped with concerns over engagement of labour when it is in especially short supply.
Many left the industry when the new IR35 rules came into play (in April 2021). However, with increases to the cost of living and with pension funds falling there is now a real incentive to return to work. So scrapping the IR35 changes would have helped to drive recruitment at exactly the right time. Although the new Chancellor spared the stamp duty reduction, this is really a non-event anyway given the increase in borrowing costs.
We look to be moving from expansion to contraction. Increased interest rates will be very damaging for the sector. Ideally, we need tax relief on mortgage interest for first-time buyers.
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