AS16………….IR35……………Are you ready?
April 6th, 2017 is fast approaching and with that comes all the changes relating to IR35 legislation. Whilst the Public Sector dominates the spotlight for the change, the private sector doesn’t go unnoticed.
Within the Public Sector, we are seeing legislative change, like we’ve never seen before. The most significant factor seeing the end client being responsible for the compliance of their contractors.
Don’t underestimate this change. The new rules will apply to ALL payments from 6th April, regardless if work was carried out before this date.
Whilst many are continuing to challenge and question the changes, April 6th is not going to go away. The losses to the Revenue (in excess of £400m from non-compliant PSC’s) are too significant for HMRC not to act and ensure that tax and wider deductions are appropriately deducted and reclaimed. Whilst the legislation has faced challenge and criticism given the impact this places on the UK’s flexible workforce, the Public Sector will provide the litmus test, and will determine future roll out to the Private Sector, which, as many predict, will soon follow.
Whilst many have suggested IR35 is the biggest threat to a flexible worker population in the UK, the changes are clearly trying to make the playing field a fair one. As the famous saying goes “all good things come to an end”? Whilst this may appear crass, it’s not the intention, however, clearly there are many considerations within this, and future legislative change to ensure the UK remains at the forefront of flexible working and entrepreneurialism.
A huge question mark remains over the effectiveness and validity of HMRC’s online tool. Pending release into the public domain for testing, its integration is coming extremely close to April activation. Similarly, many remain concerned that the default position of the tool is the bias to classifying workers inside of IR35, thus collecting as much tax as possible. We’ve already seen TfL’s response, which was to impose a blanket ban on contractors operating as PSC’s – something we are likely to see a lot more of for those who simply do not want any risk placed on themselves.
IR35 and wider changes affecting the contractor population, both Public Sector and Private, will remain a hot topic for some time. Economic and political factors will play an integral part in the temporary contractor population and will determine its future landscape. The dichotomy remains, will the intentions of saving the government money prove ultimately the demise of a flexible workforce? Whilst this remains unclear for the long term, ePayMe, remain on the front foot in this ever evolving sector.
One thing is for sure, however, as April 6th approaches, YOU need to be ready.
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