Philip Hammond’s decision to extend the IR35 system from the public to the private sector could bring in over £1bn in tax revenue in its first year. Large and medium-sized companies will have to review all their contracts with freelance staff and determine whether they should be taxed under IR35 rules, rather than it falling onto the contractor to self-declare.

Moving a contractor on to IR35 means the company will be responsible for deducting income tax and employee national insurance contributions, as well as paying employer NICs.

This will come into effect from April 2020 and businesses in the construction and manufacturing sectors are among those most likely to be impacted. The changes are designed to clamp down on people setting themselves up as private companies to reduce their national insurance payments.