‘Off-Payroll Working’ in the private sector – consultation just released

Source: Contractor Calculator

interim-hub-ir35-private-sector-consultation

HMRC has today announced its consultation on off-payroll in the private sector: https://www.gov.uk/government/news/government-to-consult-on-tax-avoidance-in-the-private-sector

The consultation comes one day after an IT contractor successfully won his appeal against HMRC on IR35.

Commenting on today’s announcement Dave Chaplin, CEO and founder of contracting authority, ContractorCalculator, who has been campaigning against the reforms said: “It is the same old rhetoric from HMRC and comes in the wake of them losing an IR35 case in decisive fashion. Mel Stride says ‘It’s very important that we recognise the hard work of contractors across all sectors, who contribute to our growing economy’, but I say he is simply paying lip service as the Government seems intent on penalising the UK’s hard-working knowledge professionals. HMRC does not understand IR35, does not understand employment status case law, and is not capable of effectively enforcing the legislation. How can HMRC be expected or trusted to educate the private sector to assess the employment status of workers when they cannot even get it right themselves. If this goes ahead it will be a complete car crash.

“HMRC maintains that the reforms have helped improve compliance with IR35. However, if CEST’s assessment figures are anything to go by, the taxman’s increased tax yield is merely a result of rising non-compliance – this time among hirers and agencies.

“If HMRC cannot effectively implement the legislation then asking end-hirers and agencies to assess IR35 status will be a massive error of judgement. Promoting CEST, a tool intended to support hirers, but which creates even more uncertainty instead, has only compounded the situation.  The reforms have effectively poured glue on the flexible economy in the public sector. Introducing these changes, and CEST, to the private sector in their current format, would prove catastrophic for UK Plc and the economy overall.”

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