Extension of IR35 off payroll rules to private sector consultation response

Jun 10, 2019

In its response to the consultation “Off payroll working rules from April 2020”, the NI Tax Committee argues that basing the exemption limit on the definition of small under the Companies Act is not sufficient and that those meeting the definition of SME under the UK transfer pricing rules should instead be exempt.

HMRC’s consultation, which closed at the end of last month, examines the proposal to extend the off-payroll working rules currently in operation in the public sector to the private sector from April 2020.

The submission concludes with the following three recommendations:-

  • The exemption from these rules should apply to companies meeting the definition of SME as already used in the UK’s transfer pricing legislation as the small company definition under the Companies Act is insufficient;
  • HMRC should ensure that a dispute resolution mechanism is available through the First-Tier Tribunal system for scenarios where the process has resulted in stalemate between the parties; and
  • HMRC should provide more detail about the education and awareness-raising activities that it intends to undertake.  HMRC should also provide a firm timetable of when updates to the Check Employment Status for Tax tool will be available.