Concern raised over IR35 reform being a ‘done deal’

Talk from the government of 'working with businesses to manage potential changes' to IR35 in the private sector is raising concern that reform is a ‘done deal.’

On LinkedIn, many users signalled they feared that the vow to “mitigate the potential administrative burdens of any future [IR35] changes,” smacked of ministers already having decided that the reforms will be made.

But the timetable of the possible changes is still dividing many -- April 2020 now appears to be the favourite start date, unless the government consults (and then acts) extremely rapidly.

The nature of the prospective reforms to IR35 in the private sector is also now receiving fresh attention.

The government has called simply superimposing the public sector’s April 2017 changes on the private sector as a “possible next step.” However, it is widely regarded as their favourite option.

'Brave-thinking'

Crawford Temple of umbrella company body PRISM said: “The government has a real opportunity to create a framework, both tax and employment, that are aligned, clear and will last the test of time.

“To achieve this will take some brave thinking and not just extending existing legislation that everyone, other than HMRC, feels has failed in correctly identifying a worker’s status.”

Another trade group, IPSE, agrees that the public sector’s new IR35 model should not be the basis for the private sector’s. Andy Chamberlain, its deputy director of policy reflected:

“If, as expected, the intention is to extend the public-sector reforms to the private sector, we will vehemently oppose the measure.

“The problems caused in the public sector have been well publicised, and we will be using that evidence to reinforce our opposition to extending these damaging rules further.”

'Ill-conceived'

Agency staffing body APSCo is of the same opinion. “[While] there are still no firm timelines attached to this [consultation]….a move to extend recent legislative changes to the private sector at this time is ill-conceived.”

The body’s operations director Sam Hurley added that it would be submitting “evidence” to back-up its opinion, once the “opportunity” presents itself.

And Brookson, a contractor accountancy firm, says that getting involved is the key despite the 'done deal' fears.

“[We] urge the government to take time to consider the right approach -- based on input from across the industry,” the firm said.

Contractors' 'guiding hand'

A tax dispute advisory for contractors, WTT Consulting, hopes that those who stand to be affected the most -- contractors -- go forward and have their say too.

“It will be important for contractors to mobilise to resist the sort of disastrous changes seen in the public sector and that in doing so, it is necessary to have a coalition of skills and inputs that go beyond the narrow confines of tax.”

“There are a number of interested parties in this who have the organisation and resources to organise this,” the advisory added on ContractorUK’s Forum. “Trade bodies, umbrellas, client associations, recruiters, contractor accounting firms.”

WTT’s boss Graham Webber described his company as only a “very small player,” but reiterated the “need” for IR35 consultation officials to receive a “a guiding hand.” He appealed: “We call upon the above parties to provide that.”

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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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