On Sunday, Theresa May had announced an extra £25 billion budget for the NHS over the next five years. However, the government had not clarified where the extra funds will come from.
Funding will increase by £4.5 billion during the period 2019 – 2020 — an increase of 3.6 percent as compared to the existing budget allocation of £125 billion. This increase in funding does not reflect a rise in the budget for Northern Ireland, Scotland, and Wales. It also excludes extra cash to reduce NHS pension deficits.
After revealing the new funding plan, May had stated that certain proportion of the fund will be made available from the Brexit dividend. However, this claim has been rejected by senior member parliaments.
In addition, an independent UK research firm the Institute of Fiscal Studies have suggested that the Brexit dividend does not exist and is imaginary. Many experts are in fact predicting reduced tax revenues and growth after Brexit. This means that the only way that the government will be able to raise the amount is through increased borrowing and taxation.
A Financial Black Hole
The extra funding for the NHS represents a financial black hole in Chancellor’s Autumn Budget that must somehow be filled. Industry experts have suggested that the timing of the IR35 private sector reform has been driven by the government’s recent plans to expand the NHS budget.
Experts suggest that extending IR35 to the private sectors represents a quick fix for the problem. According to Crawford Temple, the CEO of PRISM, an independent trade association representing intermediaries, the consultation for expanding IR35 off-payroll working to the private sector appears to be a means to an end.
Temple has described the consultation to be extremely disappointing and stated that contributing to the consultation will entail a considerable cost, time, and effort of individuals and businessmen will be wasted. He had suggested that goodwill among many businesses men will be lost resulting in new problems.
The lack of strategic thinking, planning, and innovation in implementing tax policy has been severely condemned. Crawford had criticized the recourse to ‘sticking plaster’ measures used by the HMRC stating that there appears to be complacency due to low unemployment figures that can have grave consequences. There is a great need for reform in the tax and employment sector in line with the modern employment and business landscape.