What November 2018’s IR35 Forum also heard

As well as HMRC outlining to the IR35 Forum when the department deems it acceptable for engagers to assess all workers as caught by the off-payroll rules – so-called IR35 ‘blanketing,’ the November meeting also heard that:

• An HMRC official has been named online in allegations that the department said misrepresented the officials’ actions (but a clarification or correction was not provided by HMRC).

• When HMRC has been made aware of blanket determinations, HMRC has “challenged” the public authority concerned, and “provided education and support to correct the position.”

In terms of the private sector…

• An acknowledgment by the Revenue about “concerns about the capacity of the private sector to implement the reform” of IR35 from April 2020.

• Official support and HMRC guidance to help businesses implement the private sector off-payroll working rules will be provided.

• The “likely” timescale for the reform includes the consultation to outline the framework being published in New Year 2019; ahead of meetings with stakeholders to discuss the CEST improvements (already being made at the time of the November meeting), with draft legislation expected for publication in the summer.

• The timeframe for implementation of Taylor Review recommendations is more “longer term”, as opposed to the “immediate need to private sector non-compliance with the off-payroll rules.”

In terms of HMRC materials…

• Guidance on the legislation will include “real-life” scenarios across a range of sectors and industries, due to be provided to HMRC by forum members.

• Members want to engage with ‘the project to enhance CEST’ by setting up their own member-events, so asked HMRC to share more details about the CEST enhancements, and to also share the wider package of surrounding guidance.

In terms of IR35 policy…

• Consideration to “client inaccuracies” is being given by HMRC, in terms of where the tax liability ultimately should fall where engagers have erred in their IR35 decision.

• Confirmation from HMRC was given that, from April 2020, its officials will focus its efforts on ensuring businesses comply with the reform rather than historic cases -- “as they have in the public sector.”

In terms of the past and future…

• A full tax return cycle completing is not grounds in HMRC’s eyes to further assess the impact of the April 2017 framework on the public sector, and the tax authority  stands by its previous projections, including that CT and dividend tax receipts will both fall.

• ‘No evidence’ of difficulties with recruitment or costs at government departments was cited by HMRC.

• Members believe action is needed sooner than planned to target payment intermediaries, particularly non-compliant umbrellas, and non-compliance relating to the VAT Flat Rate Scheme and ‘Phoenixism.’ HMRC said its compliant action needed to be more visible.