In our recent blog published on April 22nd “IR35 – increased scrutiny from HMRC” we have given an introduction about the Intermediaries Legislation, IR35 which deals with disguised remuneration or “off payroll” work. We had also mentioned that it was decided in the 2018 budget that from 6 April 2020, the responsibility for deciding employment status will move to the private sector.
According to an analysis of responses to a government consultation by ContractorCalculator, which closed on 28 May 2019, industry bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW), the Confederation of British Industry (CBI) and the Recruitment and Employment Confederation (REC) are demanding from HMRC to delay its plans to extend the generally unpopular anti-avoidance tax law IR35 to the private sector.
Some noted that firms typically require at least 12 months to implement new IT systems and related processes in reply to such changes, and that they are only likely to do so once changes have been put into legislation. Given that law isn’t finalised until November of each year, the earliest feasible date for private sector implementation per the bodies is April 2021.
HMRC’s Check Employment Status for Tax (CEST) once again came under fire. It was launched as voluntary online tool in 2017 to help assess whether workers were classed as IR35 and has been criticized ever since.
