HMRC publish the report and conclusion of the IR35 review: IR35 will go ahead

Aspire Comment

In spite of the presentation of statistics showing the lack of industry preparation for the reforms, HMRC have confirmed their intent to proceed with implementation on 6 April 2020.

HMRC claim that a 12-month “soft touch” period will be welcomed by many businesses. In our view, this is not enough. HMRC go on to state that exceptions will not be made for “deliberate non-compliance”, with no definition of this. Will this be down to HMRC’s interpretation once again? Will genuine mistakes be seen as deliberate actions under the interpretation of one HMRC officer but not another?

If you feel that your company is not fully prepared for the off-payroll working rules extension, get in touch today. Aspire can offer bespoke training for you and your staff to ensure that you are best prepared before 6 April.

Call us today on 0121 445 6178 or email us at enquire@aspirepartnership.co.uk

Summary of the report

HMRC state that, while there remains some opposition, tax-avoidance must be addressed and IR35 will go ahead on 6 April 2020. HMRC will make the following changes to address concerns and encourage a smoother implementation:

• Customers will not have to pay penalties for errors relating to off-payroll in the first year, with the exception of deliberate non-compliance.
• HMRC will ensure that new investigations into IR35 rules will not be opened for any retrospective period prior to 6 April 2020, unless fraud is suspected.
• HMRC confirm that the rules will only apply to services carried out from 6 April 2020 onwards.
• Legislation will be amended to place a legal obligation on the client to respond to a request for information about their size from the agency/worker.
• The legislation will be made clearer regarding time limits for disagreement processes.
• The Employment Status Manuals have been updated in line with the reforms and can be accessed here.
• HMRC will be launching further products to support contractors in understanding the changes, including a self-help guide on how to spot tax avoidance schemes.

HMRC will continue to research the impacts of the reforms six months after implementation. In the meantime, HMRC aim to improve the accessibility to online guidance and offer more workshops, letters, webinars and other material.

See other news

House of Lords: “Are there any benefits to the IR35 reforms at all?”