The Public Accounts Committee (PAC) has issued a Call for Evidence on 'Lessons from implementing IR35 reforms'. With the reforms now taking effect in more sectors, the Committee will question senior officials at HMRC on what lessons have been learned from the public sector implementation of the IR35 reforms and seeks views from those affected.

Off-Payroll Working, also called IR35 by the PAC apply if a worker or contractor provides their services to the client through their own limited company or another type of intermediary. From April 2017, public bodies became responsible for determining whether IR35 applied to contractors providing services through an intermediary, where previously the intermediary or contractor was responsible.

From April 2021, these new requirements were extended to medium and large organisations in the private and third sectors.

The Committee noted that it had previously reported on concerns that some people who had complied correctly with the IR35 rules had missed out on Covid support for those still classified for tax purposes as 'self-employed'.

Additionally, five government departments, Defra, the MoJ, the DWP, the Home Office, and the Department of Health have named and shamed themselves for failing to operate the Off-Payroll Working rules correctly. In most cases, they used HMRC's own employment tool to assess the tax positions.

As a result, the Committee will be asking HMRC officials what lessons they have learned from the implementation of IR35 in the public sector. It is also seeking views from companies, organisations and individuals on their observations or comments on the IR365 reforms.

Submissions

For those interested, submissions should be made by 6 pm on Monday 14 February 2022. 

Submissions should:

  • Be concise. If it’s over 3,000 words you should include a short summary as well.
  • Include an introduction to you or your organisation and your reason for submitting evidence.

Your submission should not have been published anywhere already and be aware that your evidence will usually be published online and made public.

Useful guides on this topic 

IR35: Off-Payroll Working
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?

Off-Payroll Working: PSCs & Private Sector Engagers
The Off-Payroll Working rules only apply in cases where, if you worked directly for the End-Client in your labour supply chain you would be deemed to be its employee in terms of the employment status tests.

Off-Payroll Working: PSCs & Public Sector Engagers
The 'Off-Payroll Working' rules move IR35: the responsibility to assess a worker's employment status and to deduct Pay-As-You-Earn (PAYE) and National Insurance Contributions (NICs) from a worker's fees, away from the worker's company to the End-Client in the labour supply chain.

External links

Call for Evidence: Lessons from implementing IR35 reforms


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