Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

IR35TaxLatest NewsFreelance workers

HMRC reveals private sector off-payroll working changes

by Ashleigh Webber 6 Mar 2019
by Ashleigh Webber 6 Mar 2019

Her Majesty’s Revenue & Customs (HMRC) has unveiled a series of reforms to off-payroll working in the private sector, following changes that were made to the use of contractors in the public sector.

A consultation published this week seeks views on extending the changes to the rules – known as IR35 – into the private sector after they were applied to public organisations in 2017.

Off-payroll working

Consultation into private sector tax avoidance a ‘fatal blow‘

What are the legal rights of agency workers?

Under the proposals, which will take effect in April 2020, organisations that use off-payroll workers will be required to make stringent checks to determine their employment status and where the responsibility for tax and national insurance contributions (NIC) lies.

The organisation or party that fails to meet its obligations under the IR35 rules will be held liable, but HMRC proposes that liability will transfer through the supply chain where HMRC cannot collect from the party that owes tax or NIC. This, it says, will give all parties an incentive to comply and ensure others comply with the rules.

The consultation, which is open until 28 May, also proposes that small organisations with fewer than 50 staff or a turnover of £10.2m will be exempt from the rules.

Tom Hadley, director of policy and campaigns at the Recruitment & Employment Federation (REC) welcomed the additional clarity around the rules for private sector organisations and contractors, but said the April 2020 implementation date did not give them much time to prepare.

“Unfortunately we have waited longer than anticipated for today’s guidance. This means that the government’s timeline doesn’t leave business the recommended 18 months to prepare for the new rules and REC members are telling us that their clients are largely still unaware of the changes,” he said.

“Recruitment businesses will play a pivotal role in raising awareness throughout their client base and in helping to improve the government’s CEST (check employment status for tax) tool designed to help people check if they are considered in or out of the IR35 rules.”

He noted that the exempting small businesses from the changes would create additional challenges as agencies supplying the contractors will still need to check the status of the client they are providing services to.

Anthony Sherick, managing director of the ContractorUK forum, said HMRC’s consultation has done little to reduce the ambiguity around a contractor’s role under IR35. He said the changes will “ultimately be to the detriment of individuals and consequentially flexible working in the UK economy”.

“What last year’s Autumn budget showed was that the UK’s tax rules have simply not evolved with the changing labour market or with the growing demand for flexible working from both business and workers,” he said.

The chancellor unveiled plans to implement the changes to IR35 already made in the public sector into the private sector in last year’s Budget.

The Association of Professional Staffing Companies (APSCo) said HMRC is reviewing its CEST tool in preparation for the changes to go ahead. Tania Bowers, legal counsel at APSCo, said many organisations feel the current tool is “not fit for purpose”.

“In fact, in 2017, after the CEST tool was introduced for determining tax status in the public sector, 43% of APSCo’s members said that ‘the HMRC tool does not generally produce reasonable status decisions in light of the factual realities of placements’,” she said.

Ashleigh Webber
Ashleigh Webber

Ashleigh is editor at OHW+ and HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support. Prior to joining Personnel Today in 2018, she covered the road transport sector for Commercial Motor and Motor Transport magazines, touching on some of the employment and wellbeing issues experienced by those in road haulage.

previous post
Virgin Atlantic cabin crew can go make-up free
next post
Working time: Rest breaks need not be continuous

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Oxford study highlights best gig economy firms to...

9 Jun 2022

Deliveroo signs deal with union GMB to cover...

12 May 2022

Pimlico Plumbers holiday pay ruling: four steps for...

9 Mar 2022

‘Unfair IR35 led to rise of rogue umbrella...

10 Feb 2022

Public sector employers were underprepared for IR35, report...

10 Feb 2022

Pimlico Plumbers loses holiday pay appeal in case...

1 Feb 2022

HR and the curious intersection of free hot...

28 Jan 2022

Bill to create single worker status enters final...

27 Jan 2022

The 10 most important employment law cases in...

8 Dec 2021

IR35 reforms have been ‘damaging’, survey finds

1 Dec 2021
  • NSPCC revamps its learning strategy with child wellbeing at its heart PROMOTED | The NSPCC’s mission is to prevent abuse and neglect...Read more
  • Diversity versus inclusion: Why the difference matters PROMOTED | It’s possible for an environment to be diverse, but not inclusive...Read more
  • Five steps for organisations across the globe to become more skills-driven PROMOTED | The shift in the world of work has been felt across the globe...Read more
  • The future of workforce development PROMOTED | Northumbria University and partners share insight...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+