Experts Urge HMRC to Modify the IR35 Reform Aug 24, 2018Views: 219
The IR35 extension in the private sector is expected to have a negative effect on the labour market. This could cause a severe shortage in the market hurting the economy. Almost all recruitment, contracting, and accounting bodies have severely criticised the government’s plan to extend the off-payroll working rules to the private sector.
At the close of the IR35 consultation for private sector reform, many experts have shared their views on the impact of the controversial tax legislation in the private sector. The experts have put forward different points with the overarching aim to discourage the legislative bodies from extending the reform in the private sector.
The silence of HMRC regarding suggestions of experts apropos IR35 private sector extension suggests that their voices have simply been ignored. The suggestions of the experts that is supported by evidence show that the implementation of the reform has not resulted in the desired outcome.
Despite a large amount of evidence about flaws of the off-payroll working rules, HMRC continues to claim that the changes in the tax rules have been a success.
Experts Take a Different Approach Regarding IR35 Reform
In view of the unchanged stance of HMRC, a lot of experts have taken a different approach to prevent the blunders of the taxation reform. IR35 specialist is now calling for the government to provide employment rights to contractors similar to regular employees. They are paying taxes and thereby have every right to benefits extended to regular employees.
In the consultation response prepared by Ernst & Young, it was suggested that the government should consider developing an ‘IR35 passport’ whereby the status of contractors needs to be verified by specialists. The specialists could be an independent accredited body allowing firms to rely on their judgments thereby reducing the cost of assessments.
In addition, the majority of contractors who were surveyed by Qdos had stated that they should be given employment rights if they are deemed inside the IR35. This should be taken into consideration to avoid an abusive employment environment. In case the government does not take steps to remove flaws in the IR35 private sector reforms, it will result in a wide-scale worker exploitation and injustices that were the hallmark of the 19th and early 20th century. Progressive societies need to progress forward and make reforms to improve worker conditions. Unfortunately, the IR35 reform represents a step back to the bleak era where exploitation and abuse of worker rights were rampant.thomas.appleby likes this.
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