CIOT responds to off-payroll working in the private sector consultation

Released 8 August 2018

The Chartered Institute of Taxation (CIOT) has published its response to the consultation on the off-payroll working rules (IR35) for engagements in the private sector.

The consultation published by HM Treasury and HMRC on 18 May 2018 sought views on the best way to tackle non-compliance with the off-payroll working rules (IR35) in the private sector. The consultation document indicated that the government has evidence that the IR35 rules are not working and it is estimated that only 10% of personal service companies (PSCs) actually apply the legislation. The CIOT agrees that something needs to be done about this. However, the question is whether a rollout of the public-sector reforms, introduced with effect from April 2017, is the right approach, or whether a different approach would be more appropriate. The CIOT considers that an approach that (i) builds on existing record-keeping requirements and a requirement to secure supply chains but (ii) which also requires the business to e-file a report of payments made to PSCs to HMRC on a regular basis (and perhaps also to provide a ‘Check Employment Status for Tax’ (CEST) report to evidence whether or not the business considered that the PSC should be applying IR35), is worth seriously considering.

View the submission Off-payroll working in the private sector - CIOT comments.

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