IR35 Public Sector Reform

  • November 30, 2016

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.  The changes will instead give the organisation paying the contractor liability and responsibility for operating payroll and paying the correct taxes to HMRC. This means that the paying organisation, such as an agency or an NHS Trust, will have to make a decision on the contractor’s IR35 status even though they cannot reliably obtain the information required to make this decision.

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 the proposals with HMRC. CY has been supporting them in these activities, including providing feedback for working parties, voicing our own and contractor concerns. 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. With the latest announcements confirming that the government’s proposals will now become reality, we must find the best ways of working within these new rules. CY will continue to work closely with APSCo and our recruitment industry legal experts, to respond appropriately to the draft legislation, when it is published.