IPSE warns government against IR35 changes
(3 minutes to read)
The IPSE has warned against IR35 changes in response to the government’s ‘Off-payroll working in the private sector’ consultation.
In the aforementioned consultation, the government considered the extension of the reform to IR35 tax law from the public sector to the private sector.
In its response, the Association of Independent Professionals and the Self-Employed (IPSE) warned that pushing the change out into the private sector would:
– Heap a greater administrative burden onto UK businesses
– Reduce productivity
– Further complicate employment status law.
It particularly urged the government not to extend the reform while the uncertainty of Brexit is hanging over the economy, arguing that it needs the flexibility provided by freelancers now more than ever.
Concerns surrounding HMRC’s CEST (Check Employment Status for Tax) tool were also discussed, asking how should clients be expected to determine IR35 status when even the HMRC’s own tool cannot.
Andy Chamberlain, IPSE’s Deputy Director of Policy, commented, “Extending the changes to IR35 to the private sector would be extraordinarily short-sighted – especially now. If you believe many economists, the UK is already staring into a Brexit-shaped abyss. Why would the Government want to introduce a measure that will damage one of our greatest competitive advantages: our flexible economy?
“Research by IPSE and the CIPD has shown that the changes did serious damage to the public sector, causing walkouts, project delays and even cancellations. There are many more self-employed people in the private sector, so the damage from this could be far more significant. Not only would the changes be a major administrative burden for private sector clients; they would also limit businesses’ access to skilled flexible labour and ultimately drive down productivity.”
He added, “There is already widespread confusion about employment status law in the UK. Taxing more self-employed people as if they were employees – without giving them any of the employment benefits – would only add to this and further complicate this tangled issue. Therefore, with Brexit hanging over the country, IPSE’s response to the Government’s consultation was clear: don’t do it, and definitely don’t do it anytime soon.”
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