The Treasury has announced a review into the ‘off payroll’ (IR35) rules, seemingly aimed at making the private sector rollout as smooth as possible, rather than as a precursor to making much-needed changes to the underlying legislation.
According to the official news release, the key aim of the review will be to “…determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms, which are due to come into force in April 2020.”
Unfortunately, it would appear that the review will not look at the underlying legislation, so the planned implementation of the off-payroll rules to most private sector organisations will still go ahead, unaltered, on 6th April 2020.
What will the ‘review’ involve?
- The Government has promised to hold a series of roundtables with stakeholders, including businesses and contractor groups, to evaluate what official measures can be put in place to make sure the April 2020 implementation goes smoothly.
- Further evaluation of the controversial ‘CEST’ employment status tool has also been promised, despite a recent overhaul.
- The news release also says that the Government will take into account the experience of public sector organisations, who were forced to adopt the off-payroll rules in April 2017.
- In addition to the off-payroll announcement, “…the review will also assess whether any additional support is needed to ensure that the self-employed, who are not in the scope of the rules, are not impacted.”
At the same time, HMRC plans to put in place a “comprehensive programme of education and support activities” to help ‘customers’ to prepare for the changes.
Does this change anything?
Given that nothing of substance has been promised, aside from a desire to make a ‘success’ of the new rules, and provide additional support to those affected, a cynic might argue that the main aim of today’s press release is merely to fulfil a last-minute pre-election promise made by the Chancellor to ‘review IR35’.
At the same time, this is an opportunity for stakeholders to demonstrate how damaging the new rules will be to UK PLC.
The review is due to end in mid-February. With the Budget set to be delivered on March 11th, there is always a chance for further changes to be made before the go-live date, however, as things stand, contractors and businesses should continue to prepare themselves for what are the most significant changes to contracting since IR35 was first invented, two decades ago.
We also recommend you visit the Stop The Off-Payroll Tax campaign website, which has information on how to contact your own MP to sustain pressure on the Government to rethink this damaging tax.
An Early Day Motion (EDM13) has also been tabled calling on the Government to halt the roll-out of the off-payroll rules.
Here are some related articles:
- As a starting point, read these IR35 reform FAQs.
- What clients can do to prepare in advance of April 2020.
- What contractors can do to mitigate against the IR35 changes
- Should I keep my limited company if I’m caught by the new rules?
- Guide to tax investigation cover (IR35 insurance).