Calls for government to address IR35 issues

With the likes of Gary Lineker and Eamon Holmes recently facing IR35 legal battles, there have been calls for the government to make changes to off payroll rules.

The Association of Professional Staffing Companies (APSCo) is urging the government to address the legislation and make the changes that are so clearly needed, including introducing an offset mechanism to ensure double taxation isn’t unfairly impacting staffing firms.

Tania Bowers, Global Public Policy Director at APSCo – a member of the HMRC Intermediaries and Employment Forum – said, “APSCo has long been vocal over the reforms that are needed to ensure Off Payroll legislation doesn’t unfairly penalise both recruitment firms and highly skilled contractors.

“We continue to work closely with HMRC on changes to the rules including potential solutions to the double taxation that is inherent in the current rules.

“In its current form, Off Payroll legislates that HMRC can collect tax from the worker via corporation and personal taxes, and then recover full PAYE and NICs from the fee payer in the event of a reclassification. This is leading to recruiters and clients being unfairly taxed.

“While we anticipate news on a possible consultation on this matter will be unveiled in Spring, we stand by our view that Off Payroll itself is having a detrimental impact on the UK’s flexible labour market.

“Off Payroll has exacerbated the shortage of skilled professionals, as many left the market during or following the roll out of the rules, not wanting to change the way they work. This has consequently decreased the flexibility and agility of the labour supply chain at a time when skills are in increasingly short supply.

“We believe wider reforms are needed and will continue to work closely with HMRC to guide any future developments on behalf of the staffing sector.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.