HMRC Consultation responses show that Treasury must halt Off-Payroll Tax plans
The Stop the Off-Payroll Tax campaign has called on the Government to listen to consultation responses and halt plans to introduce the Off-Payroll Tax to the private sector.
HMRC invited responses to their consultation entitled Off-Payroll working rules from April 2020.
Analysis of the consultation responses by ContractorCalculator.co.uk has revealed serious concerns about the new proposals to address failings with the current legislation. It further exposes the way all concerns are so far being ignored by HMRC and the Treasury.
The feedback analysed consists of 29 consultation responses from a range of professional bodies including the Institute of Chartered Accountants in England and Wales (ICAEW), the Confederation of British Industry (CBI), the Recruitment and Employment Confederation (REC) and the Association of Independent Professionals and the Self Employed (IPSE).
The summary of the responses identifies several fundamental flaws with HMRC’s proposals, with experts from the tax, contracting, recruitment and legal sectors warning of the damage that legislating these changes for April 2020 would inflict on the flexible workforce and the UK economy.
Among the recurring issues and recommendations made were:
- Strong opposition to client-led disagreement process
- Liability model grossly unfair on compliant parties
- Widespread non-compliance with the Off-Payroll rules in the public sector
- Small company exemption deemed unsuitable
- HMRC’s Check Employment Status for Tax (CEST) tool is still not fit-for-purpose
- Concerns over the timing of the proposals in relation to Brexit
The very strong recommendation from the consultation is that the Treasury should halt reforms and address the many issues and flaws. There is also consensus that deemed employees must receive employment rights if they are to be taxed as employees, something that has not happened in the public sector.
The Stop the Off-Payroll Tax campaign is campaigning on behalf of contractors and the contracting sector and calling on the Government to halt the introduction of the Off-Payroll Tax to the private sector and to instead review the best way to recognise contracting in the tax system.
The summary of the consultation responses, produced by ContractorCalculator.co.uk, is here: Off-Payroll Consultation Summary of Responses.
Dave Chaplin, Director of the Stop the Off-Payroll Tax campaign and CEO of ContractorCalculator said:
The responses to HMRC’s consultation show very clearly the huge opposition to the damaging and ill-considered plans to introduce the Off-Payroll Tax to the private sector.
These responses expose the fundamental flaws in the plans and the fact that they are both unfair and damaging, something that so far HMRC and the Treasury have simply ignored in the same way they have ignored the reality of the damage the Off-Payroll Tax has done in the public sector, including the NHS.
To push through such a measure, in the face of such opposition and evidence would be reckless policy-making and something that the Government would rightly be widely criticised for. The Stop the Off-Payroll Tax campaign urges the Financial Secretary to the Treasury, Jesse Norman, to actually read the analysis of the response and if the consultation was genuine, then listen and stop the Off-Payroll Tax and then work with the contracting sector rather than attacking it.