With IR35 in the news again as celebrities, including Gary Lineker and Eamon Holmes, faced the outcome of their own legal battles, a leading trade body has reiterated its calls for changes to out-of-salary rules, including the need to introduce an offsetting mechanism to ensure double taxation does not affect Unfairly over staffing companies.
Tanya Powers, Director of Global Public Policy at APSCo – member of the HMRC Brokers and Recruitment Forum – Comments: “APSCo has always been outspoken about the reforms needed to ensure that out-of-salary legislation does not unfairly penalize recruiters and highly skilled contractors. We continue to work closely with HMRC On changes to the rules including possible solutions to the double taxation inherent in the current rules.In its current form, Off Payroll legislates that HMRC can collect taxes from the worker via company and personal taxes, and then recover the entire PAYE and NIC from the fee payer in the event of a refund. Classification This results in unfair taxation of recruits and agents.
“While we anticipate news on a potential advisory issue to be revealed in the Spring, we stand by our view that Off Payroll itself is having a detrimental effect on the UK flexible work market. Off Payroll has exacerbated the shortage of skilled professionals, leaving Too many market during or after the rules are in place, without wanting to change the way they work.This has consequently reduced flexibility and agility in the labor supply chain at a time of growing skill shortages.
“We believe broader reforms are needed and will continue to work closely with HMRC to guide any future developments on behalf of the employment sector.”
While the cases against Gary Lineker and Eamonn Holmes make national news, there are an estimated 1,000 similar cases being investigated by HMRC at any one time.