Draft legislation cements IR35 reform

Draft legislation further cements incoming IR35 reform in the private sector

In response to the publication of the Draft Finance Bill and in it, the draft legislation for IR35 reform (off payroll working rules) in the private sector, leading IR35 specialist, Qdos, has urged the companies engaging contractors to prepare immediately.

Draft legislation for the off payroll working rules was published today alongside a number of supporting documents, including the summary of responses to the latest consultation.

Containing very little change, Qdos CEO, Seb Maley, commented:

“With the arrival of the draft legislation, it seems very unlikely that there will be a U-turn or a delay at this stage, despite the fact that amid political uncertainty further IR35 reform is short-sighted and unnecessary.

“HMRC is wrongly under the impression that public sector reform has been a success. Therefore, it’s no surprise that private sector changes look like they will closely mirror those introduced in the public sector in 2017, barring a few small tweaks, such as the introduction of the term ‘status determination statement’, and that clients must respond to a contractor’s dispute in 45 days. Given the liability can transfer to the end-client, this highlights the importance of making well-informed IR35 decisions.

“The onus is now on the private sector to get ready for the arrival of these changes next April. With greater clarity over the incoming rules, private sector firms can at least focus fully on preparing for these changes, ensuring they are capable of accurately setting the tax status of contractors.”

“Recruitment agencies, that will often carry the IR35 liability as the fee-payer in the supply chain, must also get to work. To be in a position to continue attracting contractors and protect their own liability, it’s vital they collaborate with end-clients to ensure IR35 status is set accurately.”

Qdos will be publishing an in-depth review of the draft legislation shortly.