With the Government’s consultation on extending reformed public sector IR35 rules to the private sector closing in a matter of weeks, the Association of Professional Staffing Companies (APSCo) has held meetings with both HMRC and Her Majesty’s Treasury (HMT).
APSCo used the meetings to warn the Government about the accompanying risks of the proposed changes. In the wake of the recent publication of the Office of Fair Trading’s discussion paper, the trade association advised ministers to set realistic goals in relation to any private sector IR35 roll-out.
The OTS paper proposed that employers of contingent workers in the gig economy should be compelled to deduct tax from these workers’ earnings and direct it to HMRC. The proposal came under criticism from representatives of Britain’s professional contracting community, who argued that high-end contractors should not be conflated with precariously engaged, low-paid contingent workers who are vulnerable to exploitation.
APSCo underlined the point that simplifying IR35 was a priority but should take place according to a realistic timetable. During the meeting with HMRC officials, the trade body reiterated warnings about the confusion and chaos that would ensue upon hasty implementation of the reformed rules in the private sector. Private sector businesses must, APSCo cautioned, be allowed sufficient time to prepare for a major administrative change.
Last week, APSCo met with Financial Secretary to the Treasury Mel Stride to discuss the proposed policy changes. During the meeting, the trade body raised concerns that government goals would prove unrealistic if private enterprises were given insufficient time to adapt their payroll processes.
Describing the meetings with HMRC and HMT as “largely positive”, APSCo’s Director of Operations Samantha Hurley acknowledged that the amount of information public bodies are able to share at this point in a consultation is inevitably limited, although she added that a genuine desire “to get this right” was nonetheless evident.
She continued: “At the HMT meeting in particular, I think the point the Minister hopefully couldn’t fail to take on board was the need to give businesses, including those in the recruitment sector, enough time to properly prepare for any change.”
APSCo appears to be adopting a “hoping for the best while preparing for the worst” policy. It shares a strong concern with many industry experts that the reformed IR35 rules are currently unworkable and unfair, including Umbrella Company trade associations PRISM and the Freelancer and Contractor Services Association (FCSA), contractor tax specialists Qdos Contractor and contractor body the Association of Independent Professionals and the Self Employed (IPSE). Yet, it seems to accept that the rules are virtually inevitable and is seeking to ensure that they are implemented and managed properly.