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IR35: Government launches review into off-payroll working

Caroline Harwood, Partner, Head of Share Plans and Employment Tax
08/01/2020
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The Government has launched the review into the changes to the rules on IR35 due to come into effect on 6 April 2020.

The review, promised by Chancellor Sajid Javid on November 30th last year, is intended to determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms. It has also been stated that the review will include an assessment of whether any additional support is needed to ensure that the self-employed, who are not in scope of the rules, are therefore not impacted.

This is an ambitious scope given that the review is to conclude by mid-February. In addition, it may well prove interesting to see the views of self-employed contractors who have already been affected by the blanket determinations of larger engagers to payroll all off-payroll workers.

Will the review of the proposed changes to IR35 mean that there will be a deferral of the introduction of the new rules due in April 2020?

The simple answer is no. Jesse Norman, Financial Secretary to the Treasury said:

“We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules....The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.”

I hope that the review will mean the removal of seemingly less equitable aspects of the new rules, such as passing the PAYE liability up the chain of engagement to the end client if the fee payer defaults (even if the client has done everything in its power to comply correctly), but wholescale change, or further deferral, seems very unlikely.

To find out how you should prepare for the proposed changes to IR35, we have outlined the steps so far and the processes to be put in place before April 2020.

For more information on how Crowe can help, contact Caroline Harwood.

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Caroline Harwood
Caroline Harwood
Partner, Head of Share Plans and Employment Tax
London