• REC and IPSE Provide Feedback Regarding IR35 Consultation Aug 8, 2018
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    The Recruitment and Employment Confederation (REC) and the Association of Independent Professionals and the Self Employed (IPSE) have recently given comments regarding IR35 consultation. The organizations have published feedback regarding the consultation that they will submit to the government.

    The feedback of REC is based on concerns of recruiting companies. According to Karen O’ Reilly, the Confederation’s Stakeholder Engagement Manager, the extension of IR35 to the private sector in April 2019 could result in an upheaval in the private sector that can damage the labour market’s flexibility.

    Last year, the implementation of IR35 in the public sector had resulted in complex problems that need to be resolved. The REC has called on the government to carry on a full review of the effects of the off-payroll working rules. An impact assessment should be carried on out in the private sector. Also, it’s important to ensure that the issues of the private sector are considered.

    The feedback provided by IPS is drawn from the concern of contracting professionals. Following are the five main points of the feedback.

    • The IR35 rules are complex. To understand the law requires expert knowledge of case law upon which the off-payroll working rules are based. The HM Revenue and Custom’s (HMRC) CEST tool create additional difficulty in determining the employment status.
    • The decision to extend IR35 rules is us based on the false presumption that they have worked in the public sector. According to a recent research by Chartered Institute of Professional Development (CIPD), many public-sector bodies have imposed blanket determinations of the employment status. This has resulted in false results that have caused financial difficulties for a lot of independent contractors.
    • Due to the ‘disastrous’ effects of the IR35 rules, it would be imprudent to extend them to the private sector. Tristan Grove, the Press and Public Affairs Officer, had stated that extending IR35 when private businesses are facing uncertainty about the Brexit is ‘sheer madness’.
    • The decreasing productivity in the UK for the past few years will worsen when firms have to face red tape associated with the implementation of IR35.
    • IR35 rules create confusion since they tax independent contractors without granting them employment rights such as bonus and holiday pay. This confusion related to the employment status should be addressed.
    The government also needs to acknowledge the range of business models in the private sector. It should ensure that sufficient resources and time are available for private sector business. This is important so that they can adapt to the new changes in taxation requirements.
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