intermediaries legislation Articles

Proposed IR35 changes slammed by employers

Businesses have slammed some proposed changes to the Intermediaries Legislation that would mean that businesses were responsible for determining when the IR35 laws applied, instead of a contractors Public Service Company (PSC).

Businesses that use a lot of temporary staff, raised concerns that the new rules could be costly, burdensome and constraining. These businesses also stressed that it could affect their relationship with temporary workers.

Government ‘back in listening mode’ on IR35

HMRC has shelved plans to change IR35 legislation for at least one year. The Association of Independent Professionals and the Self-Employed (IPSE) claims to have received confirmation that no new legislation relating to IR35 and personal service companies (PSCs) would be published in 2016-17.

At the 2015 budget, the Chancellor George Osborne indicated that IR35 Intermediaries Legislation had to be changed because it wasn’t working properly. After a period of consultation, it seems that ministers want more time to assess the impact that any changes will have on contractors. 

9th May 2012 and HMRC have today launched a pdf in respect of Intermediaries Legislation (other known as IR35) explaining their new IR35 Business Test and also providing some typical IR35 example scenario's.

Public sector contractors despair at off-payroll IR35 consultation

If the reforms go ahead, then public sector bodies and agencies would be responsible for deciding whether a contractor qualifies for IR35 restrictions. This differs from the current system where intermediaries like individual limited companies (commonly known as personal service companies) or umbrella companies decide IR35 status.

Experts believe that this will result in more public sector contractors being ‘caught out’ by IR35 legislation. Some fear that even the most independent contractors are at risk of paying more tax because of difficulties proving the absence of IR35.

editor | 15 August 2012
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The lastest IR35 Forum minutes for July have been published on HMRc's website