The Public Accounts Committee (PAC) has expressed its views on off-payroll working reforms in its report Lessons from implementing IR35 reforms published on 25 May.
The PAC’s main conclusions were that:
- high level of non-compliance in central government reflect poor implementation by HMRC and other government bodies;
- it is too difficult for workers to challenge incorrect status determinations;
- HMRC is not doing enough to understand the impact of the reforms on workers and labour markets;
- HMRC does not appear to work proactively to establish whether any sectors have been affected disproportionately by the reforms and why;
- HMRC has not made a robust assessment of the additional costs of implementing the reforms; and
- despite years of reforming the IR35 rules, there are still structural problems with how they work i9n practice.
PAC has also recommended action points for HMRC.
These findings bear out concerns, expressed in representations, that ICAEW made to the government when the off-payroll working regime was being designed. ICAEW’s Tax Faculty contributed written evidence to the review in ICAEW 38/22, summarised with our recommendations in IR35: fundamental problems remain.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
More support on tax
ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.Sign up for TAXwireJoin the Tax Faculty
The future of tax after COVID
As digital technologies transform society, the UK government is grappling with balancing the books while ensuring its tax system is fit for purpose. Join us as we take a look at the issues and challenges facing the tax system.Read more
More from the Tax Faculty
Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter
Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.
Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.