This year’s Spring Statement from the Chancellor of the Exchequer has been rather overshadowed by Brexit but hidden amongst the various promised consultations appeared an HMRC report titled ‘Tackling tax avoidance, evasion and other forms of non-compliance’. We thought we’d share with you our view as to where we are now and where HMRC are planning to go next.
On 5th March the consultation document was released for the private sector. The consultation was largely as expected although HMRC clearly wants to place even more responsibility and liability on the supply chain than in the public sector.
In April 2017, there were major changes to how IR35 is operated in the public sector. Historically, the contractor supplying his company’s services to a client was responsible for determining whether IR35 applied to the assignment. However, from April 2017, this responsibility shifted to the client, with the agency (as the fee payer) becoming responsible for deducting tax from payments to the PSC if IR35 applied.
The Chancellor has announced that the off-payroll rules, which were introduced in the public sector last year, will be extended to the private sector with effect from April 2020. This is following submissions from PayStream, the recruitment industry, ICAEW, CBI and others that the legislation should, at least, be delayed to assess the real impact that the public sector changes have made.