Off-payroll review launched by government
07 January 2020
The government has confirmed that it is launching a review of the changes to off-payroll working rules in order to ensure smooth implementation of the reforms and to focus on the concerns of any affected businesses and individuals.
The reforms are still due to come into effect from 6 April 2020, so businesses should continue to prepare for the changes. This review aims to assess if there are any further actions that can be taken to make the transitions as seamless as possible, and will also investigate if additional support is required to ensure that the self-employed, who fall outside of the scope of the rules, are not affected.
Off-payroll working rules were introduced in 2000 and were designed to ensure that somebody who works like an employee, but through a company, pays taxes comparable to other employees. The reforms to IR35 were initially announced in the 2018 Budget and are being implemented in a bid to tackle non-compliance with off-payroll working rules. This will be achieved by shifting the responsibility for determining the tax status of contractors from the individuals themselves to the medium and large organisations that engage them in the private and third sectors.
Financial Secretary to the Treasury, Jesse Norman said:
“We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules.
The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.”
It is expected that the review will conclude in mid-February, and it has been confirmed that it will gather evidence from any affected individuals and businesses in relation to the impact of the implementation of the reforms. The government will hold a series of roundtables with stakeholders and carry out further internal analysis, which will include an extensive evaluation of the enhanced Check Employment Status for Tax (CEST) tool. Public bodies will also be approached to collect feedback on how the implementation of off-payroll working rules worked for them back in 2017.
Confirmation has been given that an additional review will be launched to investigate how the government can better support the self-employed and will include exploration of simplifying the tax system, improving access to finance and credit, and how higher quality broadband can boost homeworking.
HMRC has confirmed that it will continue to offer one-to-one engagement, webinars and workshops alongside communications to support businesses and individuals and to help them prepare for the reforms to be implemented on 6 April 2020.
The CIPP sits on the IR35 Forum and would welcome any feedback from our members in relation to the topic of the off-payroll working reforms and how preparation for the implementation of the new rules has affected them to date, and how they may continue to do so in the future, ahead of April 2020. Please get in touch at p[email protected].
Now that there is solid confirmation that the reforms to off-payroll working will be implemented from 6 April 2020, it is more important than ever for businesses and payroll departments to ensure that they are prepared for the changes, and to ensure compliancy. The CIPP offers an hour-long webinar, with the opportunity to ask questions in relation to this topic. The next one is being held on 22 January 2020, and you can enrol here.
Alternatively, there is a comprehensive half-day training course – ‘Off-payroll working and other employment status considerations.' The next one takes place on 23 January 2020 in Solihull and you can enrol here.
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