With the postponement of the Budget and the impending General Election, there are increased calls for the government to push back the implementation date for the Off Payroll Working Rules in a little over 150 days.
The draft legislation (in the Finance Bill 2019/20) has not yet been put before parliament and is now unlikely to start its journey through parliament until the new year. In previous years the Finance Bill has taken 3 - 4 months to receive Royal Ascent. The implementation date for the Off Payroll Working Rules is 6 April 2020.
Many commentators are arguing that this does not leave sufficient time for businesses to prepare.
A recent poll by Hays found that one in three affected businesses are simply unaware of the changes.
The Association of Tax Technician's John Stride has called for the start date to be delayed by 12 months, with many businesses also preparing for the implications of Brexit at the same time.
The fear is that businesses will take a risk-averse approach, pushing more individuals within IR35 and leading businesses to lose their competitive advantage as highly-skilled contractors leave, rather than facing the tax consequences.
In our view, HMRC are likely to stick to their guns, especially if the UK leaves the EU with a deal following the General Election, as the view will be that the reforms have been trailed well in advance and, if there is a deal to leave the EU, businesses will have less on their plate and will have time to focus on the changes in the new year. So watch this space (and the result of the General Election)...
FreeAgent found that out of more than 120 tax advisers, 75% believe the government should shelve its plans to extend the public sector’s IR35 changes to the private sector. As to why three-quarters of accountants say both themselves and end-users need “more time to prepare”, over eight in 10 said it was because detail from the government has been scant.