Government to push ahead with IR35 tax reforms on 6 April
The government is pushing ahead with the controversial IR35 tax reforms, following a review launched by former chancellor Sajid Javid in January.
The government has published the findings of the review into changes to the off-payroll working rules.
A few minor changes are clarified in the document, but the off-payroll working rules for the private sector will come into force on 6 April, as earlier planned.
“The government is grateful for the contributions to the review. While there remains some opposition to this change, the government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules. The reform will therefore go ahead on 6 April 2020,” the government said.
According to the HMRC, the slight changes include a “light-touch” approach to penalties, with the tax authority assuring that businesses will not have to pay penalties for inaccuracies in the first year, except in cases of deliberate non-compliance.
The HMRC will also ramp up its communications efforts, including webinars and guides, to support contractors understand the rules.
Additionally, it assured that new information from the changes will not be used to open investigations into personal service companies (PSC) for past tax years, unless fraud or criminal behaviour is suspected.
The HMRC is also set to introduce a legal obligation on organisations to respond to a request for information about their size from the agency or worker, to make it clearer who is responsible for determining the worker’s tax status.
The final legislation is due to be included in Finance Bill 2020.
The 23-page Treasury review is available here to view.