Government Gives Runaround Response to IR35 Inquiries

13th February, 2020
By 13. February 2020IR35, News
Government Gives Runaround Response to IR35 Inquiries

Independent bodies representing the recruitment sector have voiced their concerns over the April off-payroll reforms. The Recruitment & Employment Confederation (REC), along with leaders from 14 leading recruitment agencies, has written to the Chancellor asking for a delay to the off-payroll rules.

Despite the current IR35 review, representatives for the contracting industry are asking the government to press pause on the reforms in order to avoid irreparable damage to the business sector. The publication of secondary legislation before the review is complete has led many to speculate that it isn’t a genuine endeavour.

The letter to Sajid Javid outlines concerns about extending the reforms to the private sector in their present form. It makes reference to the now widespread PSC ban that’s forcing many genuine contractors onto the payroll. This, the letter says, will damage growth and productivity, with many projects already being shelved or taken offshore.

These sentiments were echoed by other stakeholders, such as accountant James Poysner, whose open letter to Javid makes the claim that 69% of contractors have been subjected to blanket IR35 determinations. He goes on to stress the economic impact in the light of Brexit, where an agile workforce is crucial in exploiting new technology.

A meeting also took place between  APSCo Director and Co-Chair of the HMRC IR35 Forum, Samantha Hurley, and Chief Secretary to the Treasury, Jesse Norman. APSCo has major concerns around the timetable for the implementation of the reforms and the accuracy of the CEST Tool.

However, it doesn’t bode well that two parliamentary questions asked by MPs regarding different aspects of the reforms have received largely identical responses from the Treasury. Conservative Luke Evans’ query on the PSC ban wasn’t even addressed, with Norman simply stating that: “Reform in the public sector in 2017 had not resulted in significant disruption to the sector, or to its use of contingent labour.” A nearly identical statement was used again by Mr Norman when, a day after Mr Evans’ question, a Labour MP asked about the number of people affected by the reform.

The response flatly refuses to acknowledge the negative impact of the reforms in the public sector, where many organisation like the NHS were left dangerously understaffed when contractors left their engagements. Research carried out by the Chartered Institute for Personnel & Development (CIPD) and the Association for Independent Professionals and the Self-Employed (IPSE), found that more than half of public sector hiring managers felt that they had lost skilled contractors, while nearly three-quarters (71%) were facing challenges in retaining them.

The government has often been accused of trotting out stock responses over IR35, however their lack of engagement with concerns is worrying. In a last-ditch attempt to make the government sit up and take notice, a protest is planned for 12th February in Westminster from 11am-3pm. After the protest, campaigners plan to present a letter to the Treasury before attending a drop-in session for MPs to meet constituents in the Macmillan Room at Portcullis House, hosted by Tim Farron MP, former leader of the Lib Dems.

This content has been supplied by IR35 Guru.

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