APSCo attacks IR35 proposal as unworkable

Newly proposed changes to IR35 are “unworkable” as they run contrary to the established public law proposition that legislation must be fair and rational, a staffing body says.

In fact, recruiters will be responsible for public contractors’ IR35 status from April 2017, but will “not have sight of the day-to-day operations” of the PSC or its worker, said APSCo.

They will also not have sight of how the client interacts with the PSC so, overall, will have “no visibility of the role undertaken or how the services are performed,” despite being liable.

The Association of Professional Staffing Companies (APSCo) added: “Recruitment firm would have to rely on other parties to provide them with up-to-date information during the whole assignment

“[This is] information which would be required to ascertain tax status on a real-time basis. This is clearly unjust as they could end up bearing penalties attributable to other people’s lack of disclosure and conduct over which they have no control.”

Samantha Hurley, operations director at APSCo, believes that recruitment firms will simply decide that they are not prepared to take on such an “unknown liability.”

"So [the typical recruiter] will have to assume that the contractor is inside IR35,” she reflected. “[This] will result in large numbers of contractors in ‘false employment’ – and it will also mean that contractors lose control of their business tax affairs.

“Last but not least, the public sector is likely to lose access to the skills they need as contractors will be too expensive – and will choose to work in the private sector.”

Hurley also said the IR35 consultation should ask whether it is “fair and appropriate” for the public sector’s duty – as the government calls it – to be potentially transferred to private firms, such as recruiters.   

Her concern is similar to those expressed by freelancing body FCSA, as it too is arguing that the consultation by HM Revenue & Customs should be asking a different question to any of the 16 posed.

But as to what the 87-page document does contain, the stipulation that the new IR35-specfic ESI tool will be available for use outside of the public sector is stoking fears expressed in March.

APSCo said: “If these proposals are a dry run for the private sector then we fear for the whole future of the flexible workforce.”

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