Sopra Steria Recruitment, one of the UK’s leading staffing companies and managed recruitment service providers, has responded to the announcement, made in this year’s Budget, that rules around off-payroll working in the public sector – commonly known as IR35 – are scheduled to be extended to the private sector.
Changes are due to come into effect in April 2020, when businesses will become responsible for assessing an individual’s employment status. The commentary also stated that there will be a further consultation, to influence the way in which these changes are introduced, plus a statement that small businesses will be excluded from the new rules.
Sopra Steria Recruitment was heavily involved in the consultation, not only through providing its own response to the proposals, but also by encouraging clients to engage and helping to shape the response from the Association of Professional Staffing Companies (APSCo).
In Sopra Steria Recruitment’s response to the consultation, it proposed an alternative to the suggestions put forward: to ensure administration associated with any changes is as simple as possible, HMRC should use the data already provided by ‘agencies’ through employment intermediary reporting to track down all workers operating as PSCs and receiving gross payments. It also recommend that HMRC issue a Check Employment Status for Tax (CEST) questionnaire to each worker, demanding verification by the client and worker for issue to HMRC so that it is able to assess tax status directly from the PSC for each worker, on a monthly basis.
Pete Holliday, Managing Director, Sopra Steria Recruitment, commented:
“Although we are pleased that the Government has listened to the point we made about true engagement with all parties, we are disappointed that the intent still seems to be to force end-users to become tax assessors and employment businesses to become ‘tax deductors’. We responded directly to HMRC and HMT as well as supporting APSCo in its response. We also managed to get many of our Private Sector clients involved whom we believe responded directly, from an end-user perspective.
“Our consultation response, and our dialogue with our clients, focused on the flawed ownership and method of assessing the tax status of thousands of PSC contractors – specifically that it is inappropriate to ask a user of flexible workers to become a tax assessor and to ask Employment Businesses to become tax deductors.
“We are disappointed that the Chancellor has indicated that changes will be brought in, in line with those already in place in Public Sector. We still hold the view that HMRC should do this work in the same way that it does for employed individuals, under self-assessment or HMRC assessment.
“We do welcome the postponement of the changes until April 2020, which will allow time for further consultation and for end users and employment businesses to prepare themselves to change their business models to be able to manage multiple contractor tax assessment and deduction. However, we are disappointed that the Government has not responded to the impact on the companies who will be facing these changes in terms of unrecoverable costs, compliance, their ability to retain key skills and the continuation of flexible working that drives the UK economy. We trust that the indicated further consultation will address these fundamental issues.”