The details published on the launch of the IR35 review last week suggest that April’s reform will be implemented, a number of contracting experts have said.
While the news that a review would be held to focus on the incoming changes was initially welcomed in December, the opening of the review itself has been heavily criticised. This is because the IR35 review document makes no mention of a possible delay or the halting of changes. Instead, HMRC has said the review “will focus on the implementation of these reforms, which are due to come into force on 6th April 2020.”
As a result, IR35 specialists have advised contractors to prepare for the introduction of the changes on 6th April, which will see independent workers lose the right to set their own tax status when engaged with medium and large firms in the private sector.
Staffing body, ASPCO, was one of the first specialists to react to the opening of the review, with Tania Bowers, the association’s Legal Counsel, doubtful of whether the Government is taking it seriously.
“There is certainly a feeling among some that this review is just a formality, with the Government obliged to follow through with a commitment that the Chancellor made publically last year during the run-up to the General Election.”
She also added: “While we are not altogether surprised by this announcement, we are disappointed that there is no intention of delaying incoming changes.”
This feeling was shared by Julia Kermode, CEO of FCSA, who last week said: “We have also learned today that the review will focus on the implementation of the reforms rather than the reforms themselves, which is not what was suggested and is not what is needed. I fear that the pledge is simply the Government paying lip-service to empty election promises and nothing short of an insult.”
With the Government appearing to ignore the advice of experts and delay IR35 changes, other interested parties – such Kingsbridge – has instructed contractors, recruiters and engagers to work off the premise that reform will be rolled out until told otherwise.
Legal Manager at Kingsbridge, Nicola Hayman urged the affected parties to “continue to prepare for incoming reforms – there simply isn’t time to wait for the outcome of the review and final legislation.”
Of a similar opinion was the Recruitment and Employment Confederation’s (REC) Chief Executive, Neil Carberry, who also recommended that the Government delays reform while an independent review is conducted.
“It would make sense to delay the implementation date while a full, independent review takes place. Delaying will allow MPs to properly take stock of the impact the legislation will have.”
He then went on to say: “Importantly a delay will afford businesses a more reasonable amount of time to prepare at a time when they are facing an unpredictable economy and major skills shortages.”