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
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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
6 Recommendation Acknowledged
Second Report - Lessons from imple…
Despite years of reforming the IR35 rules, there are still structural problems with how they...
Despite years of reforming the IR35 rules, there are still structural problems with how they work in practice. The IR35 rules do not work well with the realities Lessons from implementing IR35 reforms 7 of contracting, both in determining workers’ … Read more
Government Response
The government agrees with the committee's recommendation to review the system, but the response primarily describes existing processes for addressing tax collection issues and ongoing efforts to improve data collection and prevent double taxation, without committing to specific new actions or a timeline for the review itself.
HM Treasury
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9 Conclusion Acknowledged
Second Report - Lessons from imple…
Since 2021, individuals have had the statutory right to raise a dispute with their hirer...
Since 2021, individuals have had the statutory right to raise a dispute with their hirer if they disagree with their status determination, and the hiring organisation must respond formally within 45 days. If both parties continue to disagree, the worker … Read more
Government Response
The government acknowledges the conclusion and notes that there are established appeal routes for customers who disagree with tax assessments, but asserts that the reforms to the off-payroll working rules were the best way to achieve correct employment status from the start.
HM Treasury
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12 Conclusion Acknowledged
Second Report - Lessons from imple…
The IR35 reforms made hiring organisations responsible for determining a contractor’s tax status.21 HMRC told...
The IR35 reforms made hiring organisations responsible for determining a contractor’s tax status.21 HMRC told us it interprets IR35 as applying to individual engagements, but that courts have not always taken the same approach. In particular, recent court rulings suggest … Read more
Government Response
The government agrees with the committee's recommendation to review the system, but the response primarily describes existing processes for addressing tax collection issues and ongoing efforts to improve data collection and prevent double taxation, without committing to specific new actions or a timeline for the review itself.
HM Treasury
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13 Conclusion Acknowledged
Second Report - Lessons from imple…
The realities of contracting also mean that hiring organisations will likely not have the data...
The realities of contracting also mean that hiring organisations will likely not have the data required to identify and correct mistakes when workers have been incorrectly engaged on a self-employed basis. In particular, the hirer would not normally collect a … Read more
Government Response
The government agrees with the committee's recommendation to review the system, but the response primarily describes existing processes for addressing tax collection issues and ongoing efforts to improve data collection and prevent double taxation, without committing to specific new actions or a timeline for the review itself.
HM Treasury
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16 Conclusion Acknowledged
Second Report - Lessons from imple…
Stakeholders have for some time reported that risk-averseness of hiring organisations could result in a...
Stakeholders have for some time reported that risk-averseness of hiring organisations could result in a decision to stop engaging freelance contractors.30 More recently, surveys conducted by organisations that represent or provide tax advice to contractors have found substantial numbers of … Read more
Government Response
The government agrees with the committee's recommendation to research the impacts of the IR35 reforms, and the response primarily describes existing and planned research efforts.
HM Treasury
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18 Conclusion Acknowledged
Second Report - Lessons from imple…
In addition to understanding the impact of the reforms on the economy and workforce as...
In addition to understanding the impact of the reforms on the economy and workforce as a whole, it is also important to establish whether any sectors have been disproportionately affected and what additional guidance or support may be needed. For … Read more
Government Response
The government agrees with the committee's recommendation to research the impacts of the IR35 reforms, and the response primarily describes existing and planned research efforts.
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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