Lessons from implementing IR35 reforms

Public Accounts Committee Closed Inquiry
Opened: 12 Jan 2022 Closed: 2 Sep 2022 Parliament page
Lessons from implementing IR35 reforms “Off-payroll working” - known as ‘IR35’ - tax rules can apply if a worker or “contractor” provides their services to the client through their own limited company or another type of intermediary. The rules aim to make sure that workers who would be classed as … Read more
12 Recommendations
10 Conclusions
1 Report
1 Oral session
1 Letter
1 Event
Activity timeline 5 events
2 Sep
2022
Report published
25 May
2022
Report published
22 Feb
2022
Correspondence
21 Feb
2022
Oral evidence
21 Feb
2022
Formal meeting (oral evidence session) · The Wilson Room, Portcullis House
Oral evidence sessions 1 session
21 Feb 2022
View on parliament.uk
Lessons from implementing IR35 reforms
Jim Harra · HMRC Nicole Newbury · HMRC Pete Downing · HM Revenue and Customs
Title HC No. Published Items Response
Second Report - Lessons from implementing IR35 reforms HC 60 25 May 2022 22 Responded
Recommendations & Conclusions
6 results
Clear
3 Recommendation Accepted
Second Report - Lessons from imple…
HMRC is not doing enough to understand the impact of the reforms on workers and...
HMRC is not doing enough to understand the impact of the reforms on workers and labour markets. The complexity of the rules, and the perceived risk to hiring organisations of failing to comply with them, may lead to changes in … Read more
Government Response
The government will conduct and publish specific research into the impacts of the IR35 reforms on contractors and labour markets, with a target implementation date of December 2023. They disagree with the committee's conclusion but agree with the recommendation.
HM Treasury
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4 Recommendation Accepted
Second Report - Lessons from imple…
We are not confident that HMRC works proactively to establish whether any sectors have been...
We are not confident that HMRC works proactively to establish whether any sectors have been affected disproportionately by the reforms and why. Issues in UK supply chains have been widely reported in recent months, for example in fuel and groceries. … Read more
Government Response
HMRC agrees to proactively identify and work with sectors that have been particularly affected by the reforms, and will develop and implement a stakeholder engagement strategy to develop its understanding of the specific challenges faced by particular sectors, with an update due in six months.
HM Treasury
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10 Conclusion Accepted
Second Report - Lessons from imple…
We asked HMRC to what extent it considered that hiring organisations were treating workers unfairly,...
We asked HMRC to what extent it considered that hiring organisations were treating workers unfairly, for example by using ‘blanket assessments’ instead of assessing workers on a case-by-case basis. HMRC told us it had seen limited evidence of blanket assessments, … Read more
Government Response
HMRC states that it already provides additional support to address challenges faced by specific sectors through factsheets and guidance, and it is committed to continuing to support customers with compliance at a sector-specific level.
HM Treasury
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15 Recommendation Accepted
Second Report - Lessons from imple…
The complexity of the rules, and the perceived risk to hiring organisations of failing to...
The complexity of the rules, and the perceived risk to hiring organisations of failing to comply with them, could lead to changes in behaviour by both workers and hirers. For example, while firms must assess each role individually and not … Read more
Government Response
The government agrees to conduct and publish specific research into the impacts of the IR35 reforms on contractors and labour markets, with a target implementation date of December 2023.
HM Treasury
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17 Recommendation Accepted
Second Report - Lessons from imple…
HMRC has not carried out research into these types of wider impacts from the perspective...
HMRC has not carried out research into these types of wider impacts from the perspective of workers, and is not convinced by evidence provided by others even where this indicates there may be significant issues.33 In its own research, HMRC … Read more
Government Response
The government will conduct and publish specific research into the impacts of the IR35 reforms on contractors and labour markets, with a target implementation date of December 2023. They disagree with the committee's conclusion but agree with the recommendation.
HM Treasury
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19 Recommendation Accepted
Second Report - Lessons from imple…
It is not yet clear to what extent the IR35 changes may have contributed to...
It is not yet clear to what extent the IR35 changes may have contributed to these issues by affecting hiring practices and decisions made by contractors in key parts of the workforce.38 HMRC believes that the reforms are unlikely to … Read more
Government Response
HMRC will proactively identify and work with sectors that have been particularly affected by the reforms to understand the challenges and how to address them, and will develop and implement a stakeholder engagement strategy. HMRC will provide the committee with an update in six months.
HM Treasury
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Government Response AI assessment · 20 of 12 classified
Accepted 6
Accepted in Part 5
Acknowledged 6
Not Addressed 3
Total 12 recs + 10 conclusions
Correspondence 1 letter
22 Feb 2022 Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re Off-payroll research report publication, dated 8 February 2022
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