IR35 plans too complicated for the Office of Tax Simplification

09/09/2016 - 13:27

The Office of Tax Simplification has become the latest in a long line of organisations to criticise the government’s new IR35 proposals, which relate to contractors in the public sector.

Following criticism from several industry bodies in recent weeks and months, the Office of Tax Simplification, which is a government body, concluded that the new IR35 proposals “will not, overall, deliver simplification.”

The new plans would see the decision of IR35 ‘status’ left to the hiring public sector organisation. In effect, this will mean a lot more public sector contractors will fall into the IR35 trap, often unfairly.

And as we have highlighted previously, the proposals could have some disastrous unintended consequences for public sector organisations and some of the individuals working in them.

The Office of Tax Simplification has focused its criticism elsewhere. But it remains a critical blow to the plans first brought forward by the now ex-chancellor George Osborne.

In short, the government body believes that the new proposals will make the system more complex, not simpler. While it claims to support the need for ‘greater certainty and clarity’ when it comes to IR35 rules, it highlighted a number of problems with the proposed new system.

They raised concerns about the need to request information in order to determine IR35 status, suggesting that this creates a new, unnecessary administrative burden.

Another concern was that there would be boundary issues between the public and private sector, where it may not be clear whether or not the public sector IR35 rules would be applied.

The Office of Tax Simplification also questioned the likely effectiveness of the proposed changes – suggesting that the digital tools provided by HMRC might not actually be used.

The Office of Tax Simplification was first created under the coalition government in 2010 and it has a mandate to tackle the complexities in the tax system for businesses and individuals.

Miles Grady, Director at said: “There are some quite serious problems with this policy and this should be a real wake up call to the new leadership team.

“The Office of Tax Simplification was set up to bring about a simpler tax revolution, but six years later we are still getting the same bureaucracy-heavy solutions that we always got.” 

If you need any information you can always contact the team, Call: 0800 121 6513  visit  Email: