Don't extend off-payroll rules, Hammond urged

The first explicit call for Autumn Budget 2017 not to extend the public sector’s off-payroll rules to the private sector has been sounded to the chancellor.

Philip Hammond and his government should “stop and analyse” evidence for and against any extension, rather than announcing it as a new measure on November 22nd, said PRISM.

The employment intermediary trade body explained that the April rules contain incentives for recruiters and workers to find providers that offer “high return but non-compliant solutions.”

It added that since the rules hit, it has noticed an increase in such non-compliant offerings but revealed that, when approached by HMRC, the providers disappeared without a trace.

Superimposing the same legislation on the private sector will only duplicate the problem, fears PRISM’s chief executive Crawford Temple.

“[It] is highly unlikely that HMRC will be able to collect any taxes due from the non-compliant providers and therefore the anticipated tax gains will be significantly reduced.

“Extending these rules to the private sector will exacerbate the problem and will not deliver the expected HMRC returns,” he said.

Temple believes that the ultimate solution is for Mr Hammond to order a “a structural reform of the tax system,” and resist “a sticking plaster approach of tweaking [IR35-related] rules.”

But he hinted the Revenue might need the chancellor’s attention too. Only in May, PRISM said HMRC was giving out “incorrect advice” about tax status and the rules’ implementation.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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