HMRC has published an IR35 compliance statement which confirms that it will take a ‘light touch’ approach to penalising businesses for the first year.
This suggests that only companies that deliberately don’t comply will face charges.
However, the Association of Independent Professionals and the Self-Employed(IPSE) believes that this early ‘soft touch’ approach isn’t good enough and won’t stop IR35 changes doing ‘immense damage’.
Instead, it has said that the new Chancellor must halt and ‘fundamentally reassess’ the legislation.
Andy Chamberlain, Deputy Director of Policy at IPSE, “The fact HMRC are apparently planning to give the IR35 changes a ‘soft landing’ suggests they are starting to understand just how damaging and disruptive they will be for business and contractors alike. Perhaps they are beginning to notice that businesses across the UK are already blanket-assessing their contractors as ‘inside IR35’ or even scrapping their contractor workforce altogether.
“This is nowhere near good enough. Taking a light touch early on will not mitigate the immense damage the changes to IR35 are going to do to contractors, their clients and the wider economy. If the new Chancellor really wants to improve the situation, he must halt and fundamentally reassess this disastrous legislation.”
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