The publication of much anticipated “Off-payroll working in the private sector” consultation has finally hit my inbox. With closing dates for comments by 10 August 2018, Summer 2018 is going to be an anxious time for the contracting industry. 
Announced in the Autumn Statement, the consultation document has been long awaited with contractors and industry experts alike holding their breath in anticipation. 
 
Well, it is finally here. 
 
What is the consultation? 
 
According to the document, it is an evaluation into how the reforms in the public sector (introduced in April 2017) have gone and the option of rolling out the same changes into the private sector. 
The scope of the consultation is to gain opinion on how to address compliance challenges in the private sector. 
 
The consultation is open from 18 May to 10 August 2018. 
 
HMRC’s Challenge 
 
HMRC state that they face a significant compliance challenge in identifying and tackling non-compliance with off-payroll working in the private sector. The main reason being that while contractors have the responsibility for determining their employment status, individual enquiries must be launched on a contractor by contractor basis which is time consuming, requiring significant resource and therefore proving to be an inefficient process. 
 
HMRC are also concerned that leaving the responsibility for employment status determination in the hands of the contractor, means people may be working side-by-side, in the same or similar roles, but with inconsistent status decisions. They claim that they want to create a fairer playing field. 
 
Mel Stride, Financial Secretary to the Treasury said that it aims to create a “fair tax system that balances efficiency and simplicity for taxpayers, while also supporting our vital public services”
 
According to the consultation document, the cost of non-compliance in the private sector is high and growing – projected to increase from £700 million in 2017/18 to £1.2 billion in 2022/23. 
 
What now? 
 
I will continue to follow the consultation and provided updates. 
 
Further reading: Consultation Document 
 
 
 
 
Written by: 
 
Nicola J O'Sullivan -  
Effective Accounting 
 
Founder | Xero Champion | IR35 Expert 
 
 
Tagged as: IR35, Legislation
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