CBI criticises taxman's IR35 proposals

The UK’s largest employers’ organisation has joined the chorus of voice objecting to the taxman’s proposals to reform IR35 in the public sector.

The CBI said that although it supported the idea of looking to improve the current and “creaking” IR35 framework, it would oppose any increase to the costs for businesses that engage contractors.

“Employers are currently in no better position than HMRC to identify disguised employment,” Josh Hardie, deputy director-general of the CBI told ContractorUK.

“The proposal to transfer responsibility to employers for determining the employment status of flexible workers risks increasing the costs on business without properly addressing the issue.”

Mr Hardie’s comments follow concerns from agency body APSCo that, despite potentially being liable for contractors’ IR35 status, recruiters will have “no visibility” to assess contractors’ IR35 status.

The UK’s largest chartered accountancy body, the ICAEW, agrees. “[We have] practical concerns about this proposal, not least that agencies will not be in a position to know whether the criteria for IR35 are met,” it said.

The body’s comments come as IPSE, the Association of Independent Professionals and the Self-Employed, writes exclusively today for ContractorUK on why the proposals are “worrying” and must be challenged.

Mounting his own challenge is Peter Grant, a contractor who has launched a petition against the “highly subjective, unclear and disproportionate” IR35, which he says should be amended.

His petition, available online, calls for “absolute clarity for a contractor of his/her IR35 status prior to a contract being signed, so that appropriate rates can be negotiated.”