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Government’s study into off-payroll reform
by Susie Hughes at 12:11 09/02/22 (News on IR35)
The Government has published a report commissioned by HMRC into the long-term effects of off-payroll working reform in the public sector.
The document, titled ‘Long-term effects of the Off-Payroll working rules reform for public sector organisations’ outlines findings based on interviews and surveys with public sector organisations.

The report by IFF Research indicates that there was little disruption or impact - but given the controversy surrounding several aspects of the regulations, some thought this didn't show the whole picture.

Some of the key findings suggest, on average:

  • 23.5 per cent of contractors were classed as inside IR35
  • 11.5 per cent of public sector bodies assessed 100% of all contractors engaged inside IR35
  • 49 per cent did not use any information (whether from HMRC or third parties) to ensure their IR35 compliance
  • 48.5 per cent of public sector bodies said zero per cent of contractors were assessed as inside IR35
  • 72 per cent said there had been no change in the number of off-payroll (outside IR35) contractors engaged between 2017 and 2020.

Pinch of salt

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Seb Maley from IR35 insurance specialists, Qdos said: “This study suggests the impact of IR35 reform in the public sector was minimal, despite there being plenty of evidence out there to contradict this. It even goes as far to say that nearly half of public sector bodies have not assessed any contractors inside IR35 whatsoever. While a welcoming statistic, I’m taking it with a pinch of salt – blanket IR35 determinations were commonplace in the public sector.

“Contractors haven’t been asked to contribute to this research either. In my view, it’s difficult to get a true sense of public sector reform if you aren’t going to ask the individuals who have been directly affected by the changes.

“We’re also told that around half of public sector organisations didn’t use any information to ensure their compliance, whether from HMRC or third party specialists. This I can believe. The hundreds of millions in tax liability and penalties issued to government departments for non-compliance shows that the public sector wasn’t nearly well prepared enough for IR35 reform.”

Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.


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Susie Hughes © Shout99 2022


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