The government announced the official launch of its Off-Payroll Review on January 7th. The review follows the pre election pledge made by Chancellor Javid in an interview with BBC’s Money Box on November 30th 2019. Although the announcement makes good on the government’s promise to address public concerns regarding this legislation, it has already received criticism from independent bodies representing the contracting sector.
While many had hoped that the review would address whether or not the reforms were an appropriate response to supposed tax avoidance, HMRC’s statement indicates that this question is not in scope. According to the website, the purpose of the review is 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.”
This would indicate that the review’s scope is narrowed to ‘how’, rather than ‘if’ or even ‘when’ the legislation will be implemented. With a conclusion forecast for mid-February, contracting bodies are saying this doesn’t allow time for an adequate review, or for businesses to adjust their preparations. With the final legislation due to be announced in the Budget on March 11th, it’s certainly cutting it fine for any changes to be incorporated.
This is a disappointing result, not just for businesses, but for contractors who are facing the prospect of blanket decisions plus the costs and administration of winding up their limited companies. The government’s statement says that the review “will also assess whether any additional support is needed to ensure that the self-employed, who are not in scope of the rules, are not impacted”. However, their well-worn assertion further down the page that “the off-payroll rules do not affect the self-employed” would seem to directly contradict this.
Chief executive of the Freelancer & Contractor Services Association, Julia Kermode, said this was “another meaningless review”, which was simply paying lip service to a promise made to win votes. Others remain more hopeful that the review could be a step towards making the legislation more workable and fair for all. As part of the review, the government stated that it will “hold a series of roundtables with stakeholders representative of those affected by the reform”, as well as carrying out “further internal analysis, including evaluation of the CEST tool”.
It remains to be seen whether the review will be a genuine undertaking, and if the amendments, should there be any, can be effectively incorporated into the legislation in the space of one month. As things stand however, contractors and businesses should continue to prepare themselves for the most significant changes to impact the contracting sector since IR35 was first introduced two decades ago.
This content has been supplied by IR35 Guru
If you’re concerned about the Off-Payroll reforms, Umbrella Exchange has a range of solutions to help keep your contracting career on track. To talk to a member of our team, call us on: 0203 393 3881
