The IPA has submitted a response to the Government’s current consultation in relation to the private sector reform of Off-payroll working rules, known as IR35. Changes to the responsibilities in determining employment status for tax are expected to come into force from April 2020.
As for the public sector in 2017, the reforms are being proposed with a view to ensuring that individuals who work like employees pay broadly the same employment taxes as employees, regardless of the structure they work through.
On a general point, the IPA welcomes the Government’s decision that the smallest organisations won’t be affected by the proposed reforms. It also welcomes the idea of using an existing definition of ‘small company’ for these purposes.
On more specific points of the consultation, the IPA suggests a number of improvements to HMRC’s tool for checking employment status for tax (CEST). These include:
Says IPA Finance Director, David Clasen:
“Since freelancers are often used by member agencies, this is an important yet complicated topic.
“Member agencies should, as soon as practicable and at the latest before 6th April 2020, identify and review their current engagements and ensure they have processes in place for making determinations of the employment status for tax purposes of the people they engage via intermediaries.”
View the full consultation document.