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Professional and contractor bodies give views on IR35 reform

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The chancellor of the exchequer has told an industry group in Birmingham that HM Treasury’s review of the off-payroll working rule changes from April 2020 will include some ‘tweaks and improvements’ and that HMRC will not take a ‘heavy handed’ approach to enforcing compliance during the first year of implementation.

The ICAEW tax faculty has responded to the consultation on draft secondary legislation for transfer of unpaid PAYE and NICs debts to other parties in the labour supply chain, calling on HMRC to be ‘proportionate’ in its treatment of non-compliance. The ICAEW is particularly concerned to see a clear explanation in legislation of the terms ‘no realistic prospect’ and ‘reasonable period of time’ in relation to HMRC’s inability to recover the debt from the deemed employer.

The ICAEW also has ‘major concerns’ on the NICs regulations, including the need to improve information flows for the status determination statement, the disagreements process, and RTI reporting.

The CIOT is concerned that the draft regulations do not adequately reflect HMRC’s pledge not to exercise the power to transfer unpaid PAYE and NIC debts in cases of genuine business failure of the deemed employer. The CIOT would like to see the draft legislation expressly prohibit the transfer of tax debts to third parties who can show they have taken reasonable care to comply with their obligations.

The House of Lords Finance Bill sub-committee held an evidence session on 24 February on the proposed changes to extend off-payroll working rules to the private sector from April 2020.

This session took oral evidence from representatives of the following business and contractor groups:

  • Confederation of British Industry (CBI);
  • Federation of Small Businesses (FSB);
  • Association of Independent Professionals and the Self-Employed (IPSE);
  • Freelancer and Contractor Services Association (FCSA);
  • Oil and Gas UK;
  • Producers Alliance for Cinema and Television (PACT); and
  • Independent Health Professionals' Association (IHPA).

The committee launched its inquiry on the draft Finance Bill legislation on 4 February. An oral session on 10 February invited evidence from representatives of the professional tax and accountancy bodies: ICAEW; ICAS; ACCA; CIOT; and LITRG. The committee’s call for written evidence closed on 25 February.

HM Treasury is due to report shortly on its review of the IR35 changes.

Issue: 1477
Categories: News