blog header image

Posted : 30 Oct 2019 at 13:43:50
Category: Important Announcement

Share this article

The Government has responded to the recent petition signed by over 14,000 people – “Stop IR35 roll-out in 2020 in private sector - due to uncertainty around Brexit”.

The Government said;

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

Click here to view the response online

SIMILAR NEWS

blog header image
IMPORTANT ANNOUNCEMENT
IR35 CHANGES IN APRIL 2021 (AGAIN)

The IR35 changes in the private sector previously scheduled for April 2020, will go ahead on 6 April 2021 The Government has now published the Finance Act which contains the final text of the off-payr ...

blog header image
IMPORTANT ANNOUNCEMENT
CHANGES ON HIRING EU WORKERS DECEMBER 31ST

CHANGES ON HIRING EU WORKERS DECEMBER 31ST Have you seen the latest news with regards to the changes to hiring workers from the EU. The transition period is ending on 31 December and there will be no ...

blog header image
IMPORTANT ANNOUNCEMENT
DELAY IMPLEMENTATION OF IR35 LEGISLATION REFORM UNTIL COVID-19 IS RESOLVED

Freelancers play a vital role in the UK economy and are the changing face of work. This petition requests the Government to delay the implementation of the upcoming IR35 legislation until COVID-19 i ...

blog header image
IMPORTANT ANNOUNCEMENT
FINANCIAL SUPPORT FOR SELF-EMPLOYED PEOPLE TO INCREASE

Chancellor Rishi Sunak this morning said that self-employed people would be given extra support due to the onset of a new national lockdown. Speaking to the BBC, he said that the cap on the current gr ...

blog header image
IMPORTANT ANNOUNCEMENT
FURLOUGH SCHEME EXTENDED AND FURTHER ECONOMIC SUPPORT ANNOUNCED

The Coronavirus Job Retention Scheme has been extended for a month with employees receiving 80% of their current salary for hours not worked and further economic support announced. People and business ...

blog header image
IMPORTANT ANNOUNCEMENT
SITES TO STAY OPEN AS SECOND LOCKDOWN BEGINS IN ENGLAND NEXT WEEK

New measures will remain in place until 2 December Construction sites will be able to stay open, as the prime minister this evening (31 October) confirmed a second lockdown in England will begin th ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory