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Both the The Guardian and The Daily Mail ran articles suggesting that the crackdown could include a 'one-month time limit' on engagements. The similarity of the articles suggests centralised briefing or what is sometimes known as 'kite-flying' when Government Departments want to test the reaction prior to an official announcement.
Daily Mail
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It claims that the Chancellor islooking at shifting the burden on to employers, and introducing new guidance to make it much clearer what constitutes employment. Going forward, anyone working for an organisation for more than a month would normally be considered to be an employee.
It is also suggested that HM Revenue and Customs is devising an online checklist to allow employers to assess quickly whether a contractor should be reclassified as a member of staff.
Guardian
The Guardian says that the Treasury has been examining ways of closing the so-called loophole after publicity surrounding BBC presenters and others who reduced their tax bills by arranging to be paid through personal service companies.
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"...Amid fears that business will complain of fresh regulations, the Government is proposing that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month. Businesses, rather than the individual, would be responsible for overseeing the rules. An agency would be responsible if they provide consultants to businesses."
In a statement re-inforcing the premise of 'kite-flying', it concludes that 'Ministers have yet to make a final decision on whether to introduce the change. They will want to see how businesses respond to the proposal at the annual conference of the CBI.
Clarification
Freelancer and self-employed group, IPSE, reacted to the news by saying that they were looking for ugrent clarification on the reports. It predicted that if they were true than it would make operating as a freelancer 'almost impossible'.
IPSE Chief Executive Chris Bryce said: “IPSE is seeking urgent clarification on whether reports of a 'one month' limit, after which individuals will be 'obliged to move onto the payroll' are under serious consideration. This would make operating a freelance business almost impossible in many instances, and would cause untold damage to the flexible economy. If the Government are giving this idea any consideration, they should think again.
“This measure was not contained within the Government’s original consultation documents and has not been raised by the Government with stakeholders in its regular IR35 Forum meetings.
"Springing such a measure on a sector which is already short on confidence could cause significant harm to the economy, which relies on independent professionals for flexibility and innovation.
“Our members see themselves as small businesses and the Government must recognise that if freelance contractors are taxed as employees, then many will expect employment rights in return. We are very concerned these measures will damage the UK’s flexible labour market, making it less tenable for independent professionals to lend their expertise to businesses requiring their services.”
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Susie Hughes © Shout99 2015
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