IR35 reforms to go ahead despite Budget delays

26th November, 2019
By 26. November 2019IR35, News

The government has confirmed that they remain committed to introducing IR35 reforms to the private sector in April 2020. While many people had hoped that the delayed budget and impending December election might stall the roll-out, HMRC are holding firm to their plans.

With no final legislation on the table, there’s been growing unease in the contracting industry as April 6th draws closer. That uneasiness has grown with the Budget being cancelled but not rescheduled, and with Brexit preparations dominating engagers’ attention.

It’s thought that the IR35 changes will now be included in the Spring Budget and swiftly pushed through. This could result in major problems for businesses that won’t have had adequate time to get to grips with the final legislation. Such a situation would repeat the rushed and subsequently problematic implementation in the public sector.

Instead of learning from the errors made in 2017, the government are making exactly the same mistakes. This is resulting in a repeat of the blanket rulings that caught contractors in the public sector. A new poll by Hays also found that an alarming one-in-three affected businesses are still unaware that IR35 is about to change.

A spokesperson for IPSE said: “The government has done nowhere near enough to prepare businesses and contractors for the changes to IR35 next April”. Meanwhile, in Commons, the Treasury Minister fielded questions about what steps have been taken to ensure mid-sized engagers are adequately prepared with the usual stock answers.

Many feel that the cancellation of the Budget should lead to a delay to IR35 reform of at least 12 months. When asked why they needed more time, three-quarters of accountants said both themselves and end-users had received insufficient detail from the government.

The lack of final legislation and detailed guidance, combined with the current problems with the CEST tool, mean that there’s a real lack of clarity about how the off-payroll reforms will operate in practice. In particular, the question of liability and the proposed client-led resolution process for status disputes needs further consideration.

The government has stated that the new IR35 rules will impact 170,000 consultants, 60,000 end-users and generate additional tax revenue of £3.1billion between 2020 and 2024. Yet they have done little to ensure that the reforms are implemented responsibly in order to avoid serious damage to UK business.

This content has been supplied by IR35 Guru.

If you’ve been affected by the Off-Payroll reforms, or if you’re unsure about your employment status, Contracting Wise has a range of options to help you keep your contracting career on track. To talk to a member of our team, call: 0203 642 8679

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