The government has released an open consultation, seeking views on how the off-payroll working rules will work from April 2020.
With the reform being extended to the private sector, the government says that the consultation ‘seeks to ensure the proposed processes are suitable for the large and diverse private sector as well as engagers in the public sector already applying the rules’.
Views and information being gathered includes:
- The scope of the reform and the impact on non-corporate engagers
- Information requirements for engagers, fee-payers and personal service companies
- Addressing status determination disagreements
Tom Hadley, Recruitment and Employment Confederation’s (REC) Director of Policy and Campaigns, responded to the consultation:
“The clock is ticking on getting the rules around IR35 right so that they work well for individuals and recruitment agencies, so we are glad to finally get sight of the government’s consultation. We have consistently argued that agencies should not bear responsibility for the client’s decision on who falls into IR35 status. We are therefore pleased to see some movement on this, with the government saying that liability for unpaid tax and NICs will rest with the party that did not fulfil its obligations. However, the proposals may well add additional complexities which is why we will continue to engage with HMRC and Treasury to find workable solutions and ensure a level playing field for compliant businesses.
“Unfortunately we have waited longer than anticipated for today’s guidance. This means that the government’s timeline doesn’t leave business the recommended 18 months to prepare for the new rules and REC members are telling us that their clients are largely still unaware of the changes. Recruitment businesses will play a pivotal role in raising awareness throughout their client base and in helping to improve the government’s CEST tool designed to help people check if they are considered in or out of the IR35 rules.”
He added, “The proposal that small companies should be exempt from having to determine the IR35 status of individuals will create its own challenges as agencies supplying the contractors will need to systematically check the status of the client they are providing services to. We want to avoid the unintended consequences of a significant burden being placed on those supplying recruitment services. Overall, these changes will not be easy to implement by April 2020, but the REC will be working closely with our members and government to ensure the changes are workable and that compliant businesses are not penalised. The stakes are high at this difficult time for the economy, but it is encouraging to hear government explicitly recognise the contribution that contractors make to businesses and public services across the country”.
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|Lucy Smith is the Managing Director for ContractorUmbrella Ltd, one of the UK’s Most Respected Umbrella Companies and founder member of AllUmbrellaCompaniesAreEqual. Learn more about Lucy on Google.|