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Autumn Budget 2017 (2): Consultation on IR35 changes in private sector
by Susie Hughes at 15:36 22/11/17 (Political News)
The Chancellor gave the clearest signal yet that the controversial changes to IR35 in the public sector will be heading for the private sector.
The so-called 'off-payroll' rules were introduced in the public sector after high-profile allegations of abuse and misuse by Government departments, quangos and other public sector bodies such as the BBC using the 'contractor' model to 'disguise employment' of highly-paid workers.

The Government felt it had to put its own house in order, but the methods were criticised after it placed additional compliance burdens on agencies and clients. It was also thought that some clients erred too much on the side of caution and made blanket decisions that put all their contractors 'inside' IR35. There was also criticism of HMRC's online status assessment tool.

Despite the wide spread concerns and condemnation, there have been fears that this provision could be extended to the private sector.

The supplementary reports to the Budget have confirmed that the Government will now consult in tackling what it describes as 'non-compliance' in the private sector, drawing on its experience in the public sector.

The Budget documents state:

"Off-payroll working in the private sector The government reformed the off-payroll working rules (known as IR35) for engagements in the public sector in April 2017.

"Early indications are that public sector compliance is increasing as a result, and therefore a possible next step would be to extend the reforms to the private sector, to ensure individuals who effectively work as employees are taxed as employees even if they choose to structure their work through a company.

"It is right that the government take account of the needs of businesses and individuals who would implement any change. Therefore the government will carefully consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018."

Further information
Shout99 will continue coverage of the stories emerging from the Budget; in the announcements after the Budget; and expert comment and analysis in the Political News section of Shout99.

Further information about IR35, can be found in News on IR35

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Susie Hughes Shout99 2017

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