IPSE urges contractors to keep fighting IR35 proposal

Wednesday 2 November 2016

The Association of Independent Professionals and the Self Employed (IPSE) is urging contractors to continue to fight proposed changes to IR35 in the public sector.

Stressing that the government's Autumn Statement is just weeks away, the organisation highlights that there is still time for contractors who are unhappy about the proposal to make their voices heard. IPSE, who have spoken out against the changes set to be introduced in April 2017, have been campaigning for the government to abandon the proposal since its announcement earlier this year. it is the responsibility of the contractor to correctly disclose their IR35 status

Currently confined to the public sector, the proposal will change where IR35 liability lies. At the moment, it is the responsibility of the contractor to get correctly disclose their IR35 status. Should this be done incorrectly, the contractor will be liable. 

However, from April 2017, it will be clients who disclose the tax status of the contractors they work with and, where IR35 applies, they will hold responsibility for deducting tax and National Insurance Contributions. 

It is this point that has been met with substantial controversy, with many contractors and IPSE suggesting that the impact on those contracting for the public sector will be a negative one. 

Indeed, in a September blog for IPSE, press and PR officer Mark Williams suggested that clients are likely to "play it safe" and declare their contractors as employees to reduce the level of risk they expose themselves to. For contractors who don't fall into the employment category, this would then mean investing time in getting that tax status change and recouping overpayments. 

Citing concerns raised by individual contractors, he noted that public sector clients won't have a grounding in tax law, which means that essentially a contractor's tax status will be assessed by a third party without the required expertise. 

However, not all commentators are convinced the change will be a negative one. Indeed, the changes have been put forward to tackle concerns that contractors are disadvantaged by the current system.

For contractors who do have concerns, though, IPSE suggests taking a number of measures. These include writing to your MP to tell them exactly how you expect the changes to affect your business, and the action the MP can take to help. 

The organisation also suggests organising a meeting with your MP instead, highlighting that one-to-one meetings should be available on most Fridays or weekends.

By Victoria McDonnell

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