IR35 private sector consultation launched

HMRC is nearing the private sector ‘off-payroll’ rollout, launching its consultation into ‘off-payroll’ working in the private sector. This news comes just days after an IT contractor won an IR35 appeal.

The objective of the consultation is to improve the rules regarding ‘off-payroll’ working so that contractors who work through their own company pay the right amount of tax. HMRC states:

“The consultation will specifically look at how to increase compliance with the existing ‘off-payroll’ working rules. These rules mean that contractors such as IT and management consultants who work through their own company but are in practice employed by a third party, pay the right tax as employees.”

Evidence suggests that people are getting the rules wrong and incorrectly paying tax as if they were self-employed. The aim of the consultation is to look at how to improve this.

Mel Stride, Financial Secretary to the Treasury, said:

“It’s very important that we recognise the hard work of contractors across all sectors, who contribute to our growing economy.

“But it’s also right that we have a fair tax system that balances efficiency and simplicity for taxpayers, while also supporting our vital public services. That’s why we’re consulting carefully and welcome a wide range of opinions and evidence on how to tackle non-compliance.”

Click here to read and respond to the consultation.

The consultation closing date is 10 August 2018.

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