What February’s IR35 Forum also heard
On top of HMRC saying it is learning lessons about IR35 reform in the public sector so, presumably, it can apply to them to the private sector, and its summary of a CEST paper on MOO, the IR35 Forum of Feb. 2018 also heard:
- Just 1 out of 9 Action Points has been “completed” by HMRC.
- A 250-strong team at HMRC have been supporting public authorities with off-payroll rule implementation -- vital, it seems, considering “people don’t understand the reform,” members said.
- An increase in the number of people ‘on-payroll’ is not in itself, in HMRC’s view, a measure of improved compliance. The department has previously implied the contrary.
- HMRC has not seen “significant evidence” from public sector managers of over-deductions of tax/NICs in disputed cases.
Contracts and Contractors
- A recognition from HMRC that contractors may feel they have been "incorrectly classified."
- A commitment from HMRC to continue to educate and explain how the April 2017 off-payroll rules work, “including to contractors.”
- Some contracts have been reworded to indicate that MOO does not exist, and they said there is indeed no MOO when those engaged can walk off a job at any point
- HMRC disputed ‘walking off at any time’ as a realistic contractual provision, especially in services contracts, and warned such reworded contracts (containing flimsy MOO changes, notably in the health sector) would be challenged.
- HMRC will make available to members “education products” pertaining to the April 2017 reforms to IR35, for them to share.
- Members report that clients feel the roll-out of last year’s IR35 changes happened too quickly, and that tax codes weren’t issued quickly enough.
- HMRC is to examine the rates of interest on income tax and corporation tax for those found inside IR35 after investigation, which members cited as able to still go on for “eight or nine years.”
3rd April, 2018