Although the Chancellor didn’t mention IR35 in his Spring Statement speech, the Government’s written statement published shortly after suggests that an extension of the public sector off payroll rules to the private sector is still on the cards.
Many industry commentators predicted that Tuesday’s Spring Statement would provide some certainty over the Government’s plans to tackle IR35 ‘non-compliance’ in the private sector, following mentions in the November 2017 Budget, and December 2017 IR35 Forum minutes.
Although the introduction of the off payroll rules into the public sector in April 2017 has been controversial, this Government appears to be determined to remove the “significant tax advantages” it claims limited company contractors enjoy.
An extension of the existing rules to the much larger private sector would appear to be the next logical step.
This seemingly insatiable drive to ‘level the playing field’ comes despite the additional risks contractors undertake, and the numerous things they have to pay for, which employees take for granted.
Consultation promised “in the coming months”
However, although a consultation has been long-expected, firm details have yet to be confirmed. The following is an extract from the Government’s written statement (13th March Commons Daily Report, p112)
In the coming months the Government will publish:
Off-payroll working a consultation on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reform. The Government will work with businesses and individuals to mitigate the potential administrative burdens of any future changes.
You can download the daily report here.
A likely implementation date?
Although the Chancellor provided no certainty to contractors potentially affected by an extension of the rules to the private sector, the fact that a consultation has yet to be announced suggests that April 2019 now appears less likely to be a realistic implementation date – if the Government decides to go ahead.
The new Budget timetable, published in December 2017, outlines the steps that new tax policies have to take from initial announcement to inclusion in the next Finance Bill.