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Markel Tax

11 Sep 2019

Our response to the draft IR35 legislation

On 11th July 2019, the Government published draft legislation on the IR35 private sector reforms that had been announced in 2018; building on their subsequent guidance and the responses to the consultation which closed in May.


The Government also asked interested parties to give their comments on the draft the legislation by 5 September 2019.


As we deal with many parties (contractors, agencies and end client businesses), we were very keen to provide our comments on the main issues that, in our opinion, need to be addressed:

  1. The legislation only seems to envision simple contractual chains and does not deal adequately with the more complex arrangements that are more commonly found in practice.  This is a particular weakness in its rules for identifying who will be treated as the end-client decision maker; there is also insufficient guidance around outsourced providers.
  2. The timescales for passing on of the Status Determination Statement (‘SDS’) are inadequate (particularly in complex contractual chains).
  3. The client-led disagreement process is open to wide interpretation and end-clients are not provided with any useful guidance or prescriptive steps to take.
  4. The provisions transferring liabilities for PAYE and NIC are vague.
  5. The Check of Employment Status for Tax (‘CEST’) tool remains woefully inadequate for the majority of contractors and end-clients to be able to arrive at an accurate result; following recent cases, there is also significant doubt that HMRC will stand by it.
  6. The Government has still not responded to the self-employed status consultation that commenced prior to the IR35 consultation process, any changes to which will impact the decision making process for IR35.
Our full commentary can be found here. Should you or your clients have any concerns over the implementation of this new legislation please contact us on 03450 660 035 or by email at taxconstractorsolutionsuk@markel.com.
 
Tagged IR35 IR35
Next article in series

10 Sep 2019

VAT: deferral of new reverse charge for the construction industry