A tax expert has described the government’s five-week review of incoming IR35 legislation as “nowhere near long enough” to fully consider its complex range of issues.
The Treasury yesterday launched its review into off payroll working rules, due to come into effect for the private sector on April 6.
It is scheduled to conclude by mid-February, with commentators noting that the announcement seems to bring no prospect of a delay to the reforms.
IR35 will stop individuals who are working as employees on a company from registering themselves as freelance contractors via their own private firms in order to pay less tax.
Oil and gas is expected to be one of the industries most drastically affected.
The review was promised by chancellor Sajid Javid on the general election campaign trail.
However, Charlotte Edwards, global employment taxes senior manager and head of IR35 at Anderson Anderson & Brown, said it doesn’t meet what was requested by concerned businesses.
She said: “The review is expected to last for around five weeks which really is nowhere near long enough to consider the complex range of issues and wide-reaching impact of the Off-Payroll reform.
“HMRC has stated that preparations will continue to implement the reforms in April. It’s also clear that the review will focus on the implementation of the reforms, rather than the reforms themselves which is not what has been requested or suggested by nearly every key stakeholder group and is not what is needed to ensure that any reform is right for contractors, businesses and the economy.
“Given the short turnaround of the review and the fact it will be done in plenty time for the Budget on the 11th March, it does seem that the Government is just paying lip-service to election promises, and I would advise businesses to continue to prepare for these changes for April 2020.”
From April 6, every medium and large private sector business in the UK will become responsible for setting the tax status of any contract worker they use, forcing thousands to pay income tax, as well as a higher rate of National Insurance.
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