The IR35 Forum minutes of the meeting held on the 11th December 2017 are now available on HMRC’s website.
From the minutes of the meeting they make indications that HMRC consider the reformed off payroll working rules (IR35) to be working and the possible next steps would be a roll out to the private sector.
Whilst this is not a ‘done deal’ there are a couple of consultation papers which are relevant which will be published in 2018, thus IR35 private sector changes could be implemented by April 2019. A member of the forum asked whether HMRC will share their criteria for the rules being a success in the public sector before they consider extending them to the private sector.
HMRC’s view is the Public Sector off payroll reforms is increasing compliance and ensuing that individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company, External forum members presented issues caused by the rules, which have included blanket decision making and concerns over staff shortages and recruitment issues in various parts of the public sector. Currently the Public Sector is not represented in the forum.
The off payroll working rule changes, have created a market for schemes which claim to have found a way around intermediaries legislation, which often involves an umbrella company. HMRC currently has cases that it is working though or pursing in the courts. There is also concern that, due to a desire to keep the same level of take home pay, contractors are moving to non compliant structures.
There is concern in the forum that contractor rates have risen as a result of the rate rises. There will be independent research published in 2018 which will include details of rates in the public sector.