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Publication of draft secondary off-payroll legislation cranks up the pressure on businesses and contractors


The publication today of the draft secondary legislation on off-working rules, set to come into force in April 2020, suggests the lobbying efforts to drop or delay some of the proposed IR35 reforms may be falling on deaf ears.

It also appears that the previously announced review into IR35, as was suggested at the launch, is restricted to considering the ‘smooth implementation’ of the rules.

In particular, the draft secondary legislation includes details on how the Government proposes to operate the controversial transfer of debt obligations – effectively the power that HMRC has to recover tax and national insurance from other parties in the contractor/intermediary/engager supply chain.

Susan Ball, RSM employer solutions partner said: ‘Earlier this year, the Government launched a review to gather evidence from affected individuals and businesses to ensure smooth implementation of the off-payroll reforms. This is due to report back in mid-February.

‘Many businesses may have been hoping that this review and earlier responses to the draft primary legislation offered the possibility that some of the more controversial elements of the rules – notably those relating to the transfer of debt provisions – may be delayed or dropped. However, the publication of this draft legislation today has upped the ante and suggests that the Government is pressing ahead.

‘Businesses that engage contractors, intermediary firms that find and place contractors as well as contractors themselves should all read this draft legislation carefully and feed back any concerns before the consultation closes on 19 February.

‘While there may be a very short window for minor changes resulting from the review to be included in the tabled final legislation, businesses and contractors need to carry on with their preparations with the expectation that the majority of the provisions contained in today’s draft and the primary legislation issued in July 2019 will reach the Statute Book.’

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