Brookson Legal IR35 Consultation Reaction

HMRC sets out its IR35 blueprint

Joe Tully, managing director of Brookson Legal, said:

“What is clear is that this is no ordinary consultation. By describing it as a ‘policy paper and consultation document’, the government is sending a clear message that the extension of IR35 into the private sector is happening and it even provides actions for businesses to take now to prepare for the reform.

“The consultation makes clear that HMRC wants all parties in the supply chain to have skin in the game. If you don’t meet your obligations under the new rules you are likely to assume risk and this means that all parties must have robust processes and communication channels in place.  The government is forcing the private sector to apply complex laws and is wrapping up that obligation with considerable administrative burdens.

“End hirers and recruiters need to start looking at their obligations under IR35 now so they can understand their level of risk and take steps to properly assess their supply chain and reassure their contract workforce.  This is the safest way of ensuring that all parties are not unduly exposed and contractors are fairly assessed.  There is much work to be done and all affected parties need to be taking action now.

“It’s important to remember that what constitutes being inside or outside of IR35 isn’t changing; it is the responsibility for applying the rules that is changing. Contractors who are currently outside of IR35 should still be outside after April next year. But for contractors currently unsure of their IR35 status, or considered ‘borderline’, there are sometimes things that can be done to tweak working practices and help them protect their contractor status. We would urge all contractors to speak with their hirers to ensure they’re being fairly assessed and explore if changes need to be made.”