IR35 Reform

IR35 Public Sector Reform

After many months of discussion, the Autumn Statement made clear that from April 2017 the Government will introduce IR35 tax changes, which will result in Personal Service Company (PSC) contractors in the public sector losing their right to determine their tax status.  After months of discussion, it is extremely disappointing that the Government has ignored all industry stakeholders, and has overridden the concerns of their own departments. This change will give recruitment firms or the organisation paying the contractor, liability and responsibility for operating payroll, deducting and paying the correct taxes to HMRC.

CY Executive Resourcing is a member of The Association of Professional Staffing Companies (APSCo), an organisation that has been heavily involved in lobbying government and discussing proposals with HMRC. We have been supporting them in these activities, including providing feedback for working parties, voicing our own and contractor concerns. Despite everyone’s best efforts, these proposals will now become reality and we must find the best ways of working within these new rules. In so doing, CY will continue to be guided by APSCO and the REC (Recruitment & Employment Confederation). In addition, we will continue to receive expert legal advice from the leading firm of solicitors specialising in these matters.   

Draft legislation for the public sector IR35 reforms was published in December, confirming that from 6th April 2017 the new rules would apply. However, there were numerous areas of uncertainty, on which further instruction is awaited. In addition, HMRC is currently working on an on-line tool that will decide whether an assignment is within or outside IR35, but as yet that has not been seen or tested.

We appreciate that these changes are of great concern to public sector contractors, who are rightly seeking up to date information. Please find below links and documents you may find useful. As new information is received, we will add it to this page.     

https://www.gov.uk/government/publications/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note

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