Government urged to reform off-payroll rules as inquiry into private sector changes is launched
The House of Lords Finance Bill sub-committee has launched an IR35 inquiry into the implementation of the new off-payroll rules in the private sector.
In the wake of the new probe, Lord Bridges of Headley, chair of the sub-committee, has told the government to conduct a “wholesale reform of IR35.”
The inquiry is a follow-up to the sub-committee’s report, Off-payroll working: treating people fairly, published in April 2020, which found that there were “inherent flaws” with the regulations.
IR35 reform has had ‘unintended consequences’
The committee is now inviting professional bodies, businesses and contractors affected by the changes to contribute to this IR35 inquiry.
IR35 reform, which came into force in April this year, shifted the responsibility of determining IR35 status from contractors to medium and large businesses.
Bridges said: “Our previous inquiry found the government’s off-payroll working rules to be riddled with problems, unfairness, and unintended consequences. We called for the wholesale reform of IR35.
“We’re carrying out this follow-up inquiry to find out about the experiences of engagers and contractors to date. We want to hear particularly from representative bodies about the experiences of individual contractors.”
First IR35 inquiry was ‘largely ignored’ by government
The move has been welcomed by industry experts who are calling on the government not to ignore the report.
Andy Chamberlain, director of policy at self-employed trade association IPSE, said: “The impacts of the IR35 changes in the private sector, implemented earlier this year, are already being felt.
“We have seen drastic shortages among HGV drivers and we know from IPSE’s research that many contractors in other sectors have closed their businesses as a result. We are therefore delighted the draft Finance Bill sub-committee will look at this issue in a follow up inquiry.
“The committee’s report prior to implementation was damning of the reforms, yet was largely ignored by government. We hope policy makers will pay more attention this time around and IPSE will certainly respond to the call for evidence.”
To provide evidence and contribute to the inquiry, please visit the government website.