Government launches review of IR35 changes

The Government has launched a review of the draft legislation extending the off-payroll rules to the private sector from April 2020. The review, which responds to widespread concerns, is expected to conclude by mid-February and the Government will launch a separate review of support for the self-employed, to ensure they are not impacted by the changes.

The review will gather evidence from affected individuals and businesses to ensure smooth implementation of the reforms.

The review will also determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms.

The reforms are designed to tackle non-compliance with off-payroll working rules by making medium and large organisations in the private and third sectors responsible for determining the tax status of contractors. The review will focus on the implementation of these reforms, which are due to come into force on 6 April 2020.

Financial Secretary to the Treasury, Jesse Norman, 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.’

As part of the review, the Government will hold a series of discussions with stakeholders representative of those affected by the reform, including contractor groups and medium and large-sized businesses, to understand how the government can ensure smooth implementation of the reforms. The Government will also carry out further internal analysis, including evaluation of the enhanced Check Employment Status for Tax (CEST) tool and public sector bodies’ experience of implementing the reform to the off-payroll working rules in 2017.

In tandem with the review, HMRC will continue its programme of education and support activities, helping customers to prepare for the reform to off-payroll working rules in April 2020. This will include one-to-one engagement, webinars and workshops alongside targeted communications and support for customers and their representatives to help them prepare for implementation on 6 April 2020.

It therefore appears at the moment that the Government intend to proceed with the changes in April 2020.