IR35: Private Sector consultation announced

24th November 2017

As we predicted in past blogs, the Chancellor announced a consultation into IR35 private sector contractors in the Autumn Budget. Since April 2017, contractors in the public sector are no longer responsible for evaluating their IR35 status; the end client is required to carry out an IR35 assessment instead. The Treasury believe this has increased compliance, ensuring individuals who effectively work as employees are taxed as employees.

 

The Budget announcement states: “the government will carefully consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018”.

 

Concerns are already being raised about hindering flexible working in the UK, which currently is beneficial to both contractor and end client. Taxes may even decrease if people are forced into lower paid permanent positions. The measure will however remove the imbalance of one set of rules for the public sector and another for the private sector.

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