Following Philip Hammond’s Budget announcement, where he confirmed the extension of the off-payroll rules to large and medium businesses in the private sector – but that roll-out would be delayed until April 2020 after ‘listening carefully to representations’.
Samantha Hurley, Operations Director at the Association of Professional Staffing Companies (APSCo) and Co-Chair of HMRC’s IR35 Forum, commented:
“While we maintain that extending changes around off-payroll working to the private sector will have an adverse impact on the strength of the UK’s labour market and wider economy, we welcome the fact that HMRC and HMT have taken on board the advice of APSCo and other influential bodies that it was wholly unfeasible to introduce changes as early as April 2019.
“When APSCo met with Rt Hon Mel Stride MP to discuss the concerns of our members during the consultation period, one point he couldn’t fail to take on board was the need to give businesses – including those in the recruitment sector – enough time to properly prepare for any changes.
“There is no doubt that the timeframe is still tight, and we would have hoped to see draft legislation before next summer. However, organisations will at least have a clearer idea from the upcoming consultation on the detail of the changes to enable them to upskill their workforces to be able to make appropriate status determinations and to get their internal processes and IT systems in order, to cope with the new rules.
“HMRC’s budget brief suggests the off-payroll rules will be extended in their current form into the private sector. APSCo has expressed real concern that the current public sector rules would not work properly in the private sector, particularly given fears over the accuracy of the CEST tool, and the lack of liability given to the end client.
“The Chancellor has confirmed that small organisations will be exempt from this extension, stating that it would minimise the “administrative burdens for the vast majority of engagers”. This seems to suggest that the Government believes that the vast majority of “engagers” of contractors are small businesses. We need to understand whether HMT means the end client users or the engagers to know how far this will limit the burden on businesses. However, we welcome that HMRC has listened to our concerns around the ability of small businesses to deal with this extra burden.
“I’d like to thank the 143 APSCo members which took the time to feed into our official consultation response, as well as those who provided individual responses. After all, it is only through sharing what’s happening on the ground that we can continue to influence policy in this way for the benefit of the entire recruitment profession.”