Second Report - Lessons from implementing IR35 reforms
Select Committee
Public Accounts Committee
HC 60
25 May 2022
Government Response (AI assessment · 20 of 22 classified)
Accepted
6
Recommendations
1 results
2
Not Addressed
We are concerned that it is too difficult for workers to challenge incorrect status determinations.
Recommendation
We are concerned that it is too difficult for workers to challenge incorrect status determinations. The absence of a clear definition of self-employment, and limited access to relevant personal information for each contractor, can make it challenging for hiring organisations …
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Government Response Summary
The response discusses the Office for Students (OfS) consulting the sector on its activity, improving communications with providers, and commissioning qualitative research. It does not address the recommendation about a fast and independent process for contractors to resolve disputes over status determinations.
HM Treasury
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Conclusions (4) Observations and findings — click to expand
1
Conclusion
Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Revenue & Customs (HMRC) regarding the implementation of off-payroll working tax rules, known as IR35.1
Government Response Summary
The government response acknowledges the receipt of the report and provides basic contextual information.
7
Conclusion
We asked HMRC what level of non-compliance it expected there to be in smaller public bodies, and whether well-resourced departments struggling to comply is a worrying sign for the reforms more generally. HMRC suggested that smaller organisations may be better placed to comply, if key personnel involved in compliance are …
8
Conclusion
The absence of a clear definition of self-employment, and limited access to relevant personal information for each contractor, can make it challenging for hiring organisations to make status determinations confidently.13 Hiring organisations can face significant financial consequences if they incorrectly assess someone as self-employed, and this risk may affect their …
20
Conclusion
Not Addressed
HMRC states that the IR35 reforms increased tax revenues by increasing the numbers of workers deemed to be employed for tax purpose. It has estimated that there was a net increase in tax revenue of £250 million during the first year of the reform, and an additional 50,000 individuals put …
Government Response Summary
The government response simply repeats the committee's conclusion, stating that HMRC believes the IR35 reforms increased tax revenues.