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HMRC response to petition

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    HMRC response to petition

    This is the response to the signed petition from HMRC.

    Looks like you will be investigated if you move from out to in within same contract.

    "Government responded:

    The Government remains committed to reforming the off-payroll working rules from April 2020. Businesses have had 18 months to prepare. HMRC are providing support and guidance to help them get ready.

    Background
    The off-payroll working rules were introduced in Finance Act 2000 and have been in place for nearly 20 years. They are designed to ensure that individuals working like employees but through their own company pay broadly the same tax and National Insurance contributions (NICs) as those who are directly employed.

    Issue
    Unfortunately, non-compliance with these rules is widespread, and costs the Exchequer a great deal of money each year, at the cost of our vital public services, placing unfair pressure on taxpayers as a whole. To address this, in April 2017 the Government reformed the way in which the rules operate in the public sector. The reform moved responsibility for determining whether the off-payroll rules apply from individual contractors to the public bodies engaging them. The reform did not introduce a new tax.

    The reform
    Evidence, including independent research conducted by IFF Research and Frontier Economics, suggests the public sector reform has been successful in improving compliance without creating disruption to the sector, or to its use of contingent labour. Revenue collected shows that since 2017, compliance with the existing off-payroll working rules has improved.

    This approach is now being extended to large and medium organisations across all sectors. The Government has consulted extensively on the reform to the off-payroll working rules and its extension to all sectors, including by drawing on the public sector experience. We have also listened carefully to affected individuals and stakeholders. In response to feedback, the Government announced at Budget 2018 that the reform would not apply to engagements with the 1.5 million smallest businesses and would be introduced from April 2020, providing medium and large engagers 18 months to prepare.

    This is about making sure the right tax is paid from 2020 onwards. HMRC will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour. Contractors who are following the existing rules will feel little impact, and the off-payroll working rules do not affect the self-employed. No-one will be prevented from working through a company if it suits them.

    Support for Business
    HM Revenue and Customs (HMRC) are working hard to ensure that everyone affected by the change can access the support they need to get it right. Since Budget 2018 HMRC have
    • published information on the detailed design of the reform in response to a 12 week consultation;
    • published draft legislation and published detailed guidance on how businesses and intermediaries can prepare for the change and set up dedicated teams to provide education and training;

    Ahead of implementation, HMRC are also:
    • offering one-to-one support to more than 2,000 of the UK’s biggest employers;
    • writing to all medium-sized businesses;
    • providing workshops, online learning, round tables, online learning;

    Finally, HMRC are also making enhancements to the online Check Employment Status for Tax (CEST) tool to make it more user-friendly in response to stakeholder feedback.

    HMRC are encouraging engagers to use the existing CEST, and they will stand by the decisions it makes. For the more complex cases, customers are able to access detailed guidance or call HMRC’s dedicated helpline for one-to-one support.

    The Government values the contribution of flexible workers to the UK economy, but it is also under an obligation to ensure fairness between individuals who work in a similar way.

    HM Treasury"

    #2
    Every statement they make is a new mutation, often contradictory and quite incompatible with their behaviour. No wonder clients are freaking out.

    Comment


      #3
      The off-payroll working rules were introduced in Finance Act 2000 and have been in place for nearly 20 years.
      Finance Act 2000 - Wikipedia

      It enacts the 2000 Budget speech made by Chancellor of the Exchequer Gordon Brown to the Parliament of the United Kingdom.
      So this Tory govt is in full support of Gordon Brown's IR35 rules then?

      Comment


        #4
        Originally posted by DimPrawn View Post
        So this Tory govt is in full support of Gordon Brown's IR35 rules then?
        The most Blairite left-of-centre Tory party in history.

        Comment


          #5
          Originally posted by DimPrawn View Post
          Finance Act 2000 - Wikipedia



          So this Tory govt is in full support of Gordon Brown's IR35 rules then?
          It doesn't matter who is in power we will still get same trash regardless of who you vote.

          Just like choosing between coke and pepsi. Giving you the illusion of choice yet both are caffeinated syrup drinks that both taste similar but both are not good for you.

          Comment


            #6
            Originally posted by cosmic View Post
            It doesn't matter who is in power we will still get same trash regardless of who you vote.

            Just like choosing between coke and pepsi. Giving you the illusion of choice yet both are caffeinated syrup drinks that both taste similar but both are not good for you.
            The LibLabCon as it is known....

            Comment


              #7
              Originally posted by cosmic View Post
              It doesn't matter who is in power we will still get same trash regardless of who you vote.

              Just like choosing between coke and pepsi. Giving you the illusion of choice yet both are caffeinated syrup drinks that both taste similar but both are not good for you.
              Brilliant. Great analogy!

              Comment


                #8
                Originally posted by cosmic View Post
                This is the response to the signed petition from HMRC.

                This is about making sure the right tax is paid from 2020 onwards. HMRC will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour. Contractors who are following the existing rules will feel little impact, and the off-payroll working rules do not affect the self-employed. No-one will be prevented from working through a company if it suits them.

                HM Treasury"
                I will never be one to actually support HMRC but I am reading that as the absolute opposite of you. This implies to me they wont investigate the likely tens of thousands that switch from out to in come April. Such contractors cannot be described as having used fraud and/or criminal behaviour unless some have been doing some seriously bad stuff. Somebody mistakingly having classed themselves out and using dividends as main payment method cannot be described as fraudulent by any stretch of the imagination.

                Comment


                  #9
                  Originally posted by DimPrawn View Post
                  Finance Act 2000 - Wikipedia



                  So this Tory govt is in full support of Gordon Brown's IR35 rules then?
                  Oh do pay attention. This is the Treasury civil service, with HMRC's support, selling their version of the truth to Parliament, who are generally too dim to even understand the question, much less why it's so utterly wrong. So there's no point in pinning this on any particular party, other than the Dim, failed tax evader turned Paymaster General, who put it into legislation.
                  Blog? What blog...?

                  Comment


                    #10
                    Originally posted by mogga71 View Post
                    This implies to me they wont investigate the likely tens of thousands that switch from out to in come April. Such contractors cannot be described as having used fraud and/or criminal behaviour
                    Good to see you have faith in HMRC not to twist their own words.

                    HMRC will only use information resulting from these changes to open a new enquiry into earlier years if there is reason to suspect fraud or criminal behaviour
                    This suggests to me that they could easily use the excuse that they suspect fraud* to open an investigation into anyone. They do not say that they won't find people inside IR35 if they haven't committed fraud, so once the investigation has been opened they can continue even if they find no fraud.

                    Maybe I'm just being cynical, but I cannot trust HMRC...

                    * There can, potentially, be a suspicion of fraud as soon as there is suspicion that an inside IR35 situation exists. This is because, if they are inside IR35, they either didn't know or knew and continued anyway. If they knew, it is fraud, and there will be a suspicion that they knew. Horrible "logic", I know, but this is HMRC...

                    Comment

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