Following the invitation by HM Treasury to submit a Budget representation, the Institute of Chartered Accountants in England and Wales (ICAEW) have released their suggestions. In their submission, they state that there should be “no new tax policy initiatives” in the Autumn Budget. The focus instead should be on working to improve the operation of current tax systems. The ICAEW also suggest that the number of policy changes in recent years has added to the complexity of the tax systems. Many of the policies need to be reviewed before further alterations are made.
With regards to IR35 and off-payroll working, ICAEW state that there are a number of problems with the current system that need to be resolved before implementing any changes into the private sector. Issues with the CEST tool must be addressed in order to make it “fit for purpose”, with funding required in order to do this. The ICAEW also conclude that the contractor’s right to appeal against their client’s and others’ employment determinations must be “strengthened and publicised”. Finally, the ICAEW suggest that if the chancellor is to roll out the changes into the private sector that this should be done, at the very earliest, in April 2020. Introducing the regime in April 2019 would not allow enough time for the changes that need to be made to be completed.
The REC and IPSE have also spoken out about the reforms, urging the government not to rush these changes into the private sector. Neil Carberry, Chief Executive of the Recruitment and Employment Confederation, has stated that “with Brexit causing uncertainty…the government can ill afford to introduce reforms which risk damaging the flexibility of the labour market at a time like this”. 74% of REC members surveyed said that the early implementation of IR35 would reduce the flexibility in the labour market to adapt to changing conditions. The IPSE are also in agreement with Andy Chamberlain, Deputy Director of Policy, noting that “it is a short-sighted tax grab that will cause untold economic damage in the long-term”. Will the chancellor heed the advice of these leading business groups? October 29th will provide the answer to this question and many more.
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