The Chancellor of the Exchequer, Philip Hammond presented his Spring Statement to Parliament on Tuesday 13 March 2018. Unfortunately, the contractor sector must wait a while longer for news on any potential IR35 changes. There is a lot of frustration within the industry as many publications are being waited upon.
What are we still waiting for?
- No mention was made of the off-payroll private sector consultation in the Spring Statement.
- HMRC’s research on the impact of the off-payroll rules on the public sector was to be published in early 2018 but also appears to have been delayed.
- There were likewise promises from HMRC of further guidance on how to claim refunds on incorrect rulings of a public sector body being inside IR35. However, this has not emerged either.
- Furthermore, there were expectations of an updated guidance on outsourced services in the public sector, which has not materialised.
- Additionally, HMRC still has not provided a response as to why Mutuality of Obligation (MOO) has not been included in the new CEST tool. Contractors were promised an explanation from HMRC in January 2018. Yet, it looks as though it now will not be disclosed until the latest IR35 Forum minutes are first published.
What is the cause for delay?
Bauer & Cottrell speculated that there could be “any number of reasons for the delay. It may be that they are waiting for the Status consultation to close in June or it could be that the current outrage against the proposed new rules is causing concern. We may not see the consultation until the full budget in November. If the latter, then it is highly unlikely that any rollout will happen until April 2020.”
What should contractors do to prepare for the unknown?
At this point in time, it’s recommended that anyone who could potentially be affected by IR35 should begin preparing for it. How can you do this? It’s simply about educating yourself and getting a clear understanding of IR35 legislation and how it’ll affect you.
For example, contractors should raise IR35 concerns with their agencies and clients, to discuss what action needs to be taken. Accountants should also contact their clients to discuss the potential influence of IR35. Agencies and clients themselves are also advised to get a good understanding what IR35 would mean for them and their businesses.
In conclusion, as expected, the Spring Statement 2018 was a streamlined version of the Autumn Budget 2017. No major news was disclosed but rather it was just an update on the overall health of the economy and the progress made since the Autumn Budget 2017. Bauer & Cottrell divulged that “the fact that the [IR35] consultation [was] not published [during the Spring Statement] is incredibly frustrating not least because we could then get a better idea of timescales” but they did permit that “it could, of course, be published [any day now] so there is absolutely no room for complacency at this stage.” Overall emphasising the importance to be on standby and as ready as possible until any news of the off-payroll private sector consultation is announced.
*Information has been sourced from K&B Accountancy Group’s associates Bauer & Cottrell.
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