IR35 changes announced in the private sector
The most important announcement impacting the professional contracting sector in today’s Autumn Budget, was not specifically referenced by The Chancellor in his speech but was buried in the details published following the speech. There are two very relevant announcements:
- Off-payroll working in the private sector – the Government has committed to “carefully consult” on how to tackle non-compliance with IR35 in the private sector. The Government has already commissioned external research which is due to be published at a date yet to be confirmed in 2018. Whether this will transpire to be a public consultation and result in subsequent changes to legislation is yet to be seen, however, we would hope that a full consultation, including all stakeholders, is undertaken.
- Employment status discussion paper – in addition to the above, the Government will also publish a discussion paper as part of its response to Matthew Taylor’s review of employment practices “exploring the case and options for longer-term reform to make the employment status tests for both employment rights and tax clearer”. This feels like a longer-term strategy compared to the above review of IR35 in the private sector, which causes a degree of concern that we may be facing multiple changes over the medium term.
Commenting on today’s announcements, Martin Hesketh, CEO of Brookson Group added:
“We are pleased that the Government don’t appear to be planning on proceeding with any changes in the short term and seem to have listened to stakeholders’ concerns that a similar change to that seen in the Public Sector could result in significant damage to the flexible labour market, and ultimately the goal to achieve a dynamic and innovative UK economy.”
“Today’s announcement will result in a period of uncertainty and we urge the Government to provide further clarity on timescales and the consultation process; that said, genuinely self-employed contractors should not panic and end hirers and agencies should not make knee jerk reactions.”
“We would expect the Government to undertake a public consultation which we will be involved in and we will continue to lobby to ensure that the outcome remains supportive of genuinely self-employed, highly productive contractors.”
“Those businesses who engage in the expected consultation process and plan adequately for the changes, stand to benefit significantly from any changes, whilst those who fail to plan effectively could face serious commercial implications.”
Brookson will be hosting a FREE webinar on the 29th November, discussing the outcomes of today’s Autumn Budget 2017 and explaining what this means for the flexible labour market. You can register for this free webinar here
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