Concerns were raised as HMRC published draft secondary legislation of the off-payroll rules for technical comment on 22 January. The release of the draft legislation has occurred before the completion of the government’s review of the IR35 rule changes. This has lead many to believe that the review won’t make any meaningful amends.
Many businesses have been hoping that some of the more controversial elements contained in the primary legislation would be axed or delayed. However, the publication of this secondary draft legislation suggests that the government is still pressing ahead without making significant provision for change.
The secondary legislation includes technical details on how the government proposes to operate the controversial transfer of debt obligations that allow HMRC to recover tax and national insurance from other parties in the supply chain. Provisions set out the requirements of the recovery notice to be used in these circumstances, along with the appropriate appeal rights.
The publication of the secondary legislation follows updates to HMRC’s internal guidelines on the CEST tool. While the tool received a direct update in November, HMRC’s internal manual shows a number of prospective CEST questions designed to determine tax status. The guide was updated on 17 January, adding questions on worker engagement, contract details, payment arrangements, mutuality and more. The current list of questions can be found in HMRC’s online internal manual.
The manual updates have not directly fed into the CEST tool, but are part of the framework HMRC is using to determine a worker’s tax-related employment status. Although it may be useful for businesses to have access to this additional information, there’s some uncertainty over what they’re supposed to do with it, given that it isn’t incorporated into a standardised ‘official’ test.
Contributions for consultation on the technical detail of this secondary draft legislation will run for 4 weeks commencing 22 January 2020 and ending 19 February 2020 at 11.45pm.
This content has been supplied by IR35 Guru.
If you’ve been affected by the Off-Payroll reforms, or if you’re unsure about your employment status, Umbrella Exchange has a range of options to help you keep your contracting career on track. To talk to a member of our team, call: 0203 393 3881