The IR35 private sector consultation has ended

And the deadline for responding to HMRC’s consultation document on extending the off-payroll rules to the private sector has expired.  So what was the outcome?

On May 18th 2018, HMRC published a consultation document – to assess the viability of expanding the legislation to the entire private sector. This was despite the  concern about the chaotic implementation, and the suggested inaccuracy of the employment status test tool.  The deadline for responses closed on Friday 10th August and the general outcome was… pretty much negative across the board.

If, or more likely when, the rules are applied to the private sector, it could have a significant impact on the contracting world. The new legislation could be in place as early as April 2019 if HMRC have their way.  Change is coming whether we like it or not.

If you search the internet for information about this change you will find a lot of negativity surrounding it.  People up in arms and calls to rally to the flag: it’s us vs HMRC.

Let me play the devils advocate:

Yes it will cause some people to take home less money.  The question which they need to answer truthfully is are they really? Have they really been paying the correct contributions?  This does come down to if they are a ‘disguised employee’ or not and if not, then they do not have to worry about IR35.  Having worked both with and for many industries I understand the loopholes, schemes and manipulations of the truth that can reward with a larger take home pay.  These are great for the individual but is it right for the greater good?

Is it the issue of taking a pay-cut that cuts deepest?  Is it having to manage their contributions accurately and honestly?  It’s hard to find solid reasoning beyond ‘the HMRC tools do not work’ and ‘it will cause chaos’ and ‘we need more time’.   If you can prove you are not a disgused employee then why defend those that are.  Surely this will help us work towards a fair and equal society (as much as that can be stated).

Is it so bad to be PAYE?  To receive the benefits of an employee?  To not have to worry that one day the tax man will come knocking at the door whether they find anything or not?

IR35 is coming to the private sector no matter what arguments are put in front of it.  The money that HMRC can reclaim far outweighs any worry about the impact it might have and lets face it, money has the loudest voice in this arena.