This week the HMRC released its consultation into off-payroll working in the private sector, raising questions on the timing and suitability of the implementation among the recruitment industry trade bodies.
In the Autumn Budget 2017, the government announced it would consult on how to tackle non-compliance with the off-payroll working rules in the private sector (otherwise known as IR35), and is now asking for comments on the best way to do this.
The consultation remains open until 11.45pm on 10 August 2018.
Commenting on the consultation, the Recruitment & Employment Confederation (REC)’s director of policy, Tom Hadley, said: “We support the government’s efforts to improve compliance and ensure everyone pays the right amount of tax but are concerned that the government wants to proceed with reforms which would cause significant upheaval to private sector employers and recruiters. This consultation is a good opportunity to rectify issues such as those with the CEST tool which have been flagged by recruiters.
“We are pleased to see the government acknowledge that the public sector needed more time to prepare and adapt to the public-sector changes. … We look forward to gathering members’ views and representing our industry on this issue over the coming months.”
Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA) which has long campaigned against the reforms, added:
“HMRC’s track record on IR35 is dismal and it is unthinkable that it can expect end-hirers to take responsibility for IR35 when it is proven that they cannot implement it properly themselves. The reforms in the public sector have had a devastating impact as has been widely reported.
“It is interesting to read that HMRC is not simply planning to replicate a roll-out of the public-sector reforms into the private sector and is considering other options such as supply chain assurance and additional record-keeping processes, which aligns with the governments Labour Market Strategy issued last week.
“Worryingly, the timescale of this consultation means that changes could still introduced for April 2019, although I hope that common sense prevails and that any changes are properly planned so that we do not disrupt the economy at a critical time when we leave the EU.”