• APSCo Meets with HM Treasury and HMRC to Warn About IR35 Private Sector Roll-out Aug 4, 2018
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    The UK government had introduced a consultation in May this year for extending the controversial IR35 reform to the private sector.

    The IR35 consultation paper had proposed that private sector employers should determine employment status and deduct taxes of contract workers deemed to be inside IR35. The proposal has been highly criticized, particularly by contracting firms.

    With consultation within weeks of closing, the Association of Professional Staffing Companies (APSCo) had met with the HM Treasury (HMT) and HM Revenue and Customs (HMRC) to warn about the risks of rolling out IR35 in the private sector.

    The trade body that represents hiring agencies had informed HMT and HMRC about potential chaos due to hasty implementation of the reform in the private sector. Private sector companies according to APSCo should be allowed time to prepare for the roll-out of IR35.

    Unrealistic IR35 Goals

    At the meeting, APSCo had underlined the unreasonable expectations of the government in raising revenue through implementation of the tax rules. The trade body had stated that the concerns of the private enterprises should be addressed before introducing the IR35 reform.

    APSCo emphasized that removing confusion regarding IR35 should be a priority of the public bodies. Also, the reform should be introduced in a systematic manner using a realistic timetable. The private firm should be allowed to modify their payroll processes as per the new tax requirements.

    Samantha Hurley, the Director of Operations at APSCo had described the meeting with HMT and HMRC as largely positive. However, she had acknowledged that the public bodies have not shared sufficient details about the proposed tax reform. She stated that the Minister should allow private sector businesses, particularly the staffing agencies, time to adjust to the change.

    APSCo seems to have given up hope that the government will retract from its decision to introduce IR35 rules. It has adopted a ‘hope for the best and prepare for the worst’ strategy in dealing with the situation.

    While the agency has shared its strong concern with the public-sector bodies, it has not pushed for cancellation of the reform. Instead, the agency is hoping that the reform is implemented properly which results in minimum damage to private sector concerns. The recent meeting with HMT and HMRC shows that the thinking of the agency is now all about damage control.
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