Stop The Off-Payroll Tax Campaign

Why off payroll shouldn't be rolled out?

The roll out of the off-payroll rules is planned for April 2020 and it is bound to make a huge damage to the UK flexible workforce as we are already seeing what is happening with the contractors.

As per Association of Taxation Technicians (ATT), cancellation of UK budget next month will lead to delay in the change by which businesses employ the services of contractors. ATT wants that off-payroll rules should be delayed for another 12 months due to this reason – the longer the budget will be delayed, longer the businesses have to wait for the final outcome of these controversial changes to the off-payroll rules.

In case the rules are implemented as per the proposed date i.e. 6th April 2020 and the responsibility of deciding that whether contractual agreement between two parties (one being freelancer or a contractor) falls within the off-payroll rules will move from the worker’s personal company to the client (company in need of worker’s services). Party paying the personal service company (client or agency) referred as ‘fee-payer’ needs to operate PAYE & NIC’s too.

Read More: HMRC Consultation Document for Off-Payroll working in Private Sector

HMRC’s Check Employment Status for Tax (CEST) tool is unable to provide clarity that how the off-payroll rules will operate in the private sector. Therefore, it becomes difficult or almost impossible for businesses to make sufficient preparations for the implementation of the off-payroll rules in the private sector as businesses are not fully aware of it.

ATT also said that “There are only 5 months left for the businesses in order to get prepare for such a big change but right now almost all businesses are busy in doing preparations for or responding to the implications of Brexit”.

Jon stride “Co-chairman of ATT’s technical steering group request the government to delay this major change of how businesses engage with contractors until 2021. There are many practical issues which should be taken care of such as –

• When the liability can be transferred with an engagement supply chain?
• What information needs to be shared by the clients?

The above mentioned points are not addressed by the legislation in the draft at all as well as no information is provided by HMRC through their campaigns to offer knowledge to the contractors as well as businesses regarding off-payroll tax in the private sector.

If it will not be delayed and the resources are already been forced, we expect a low level of compliance, increased number of errors, high demand of HMRC telephone lines and support from HMRC staff.

With no detailed guidance from HMRC, absence of final legislation may increase the risk of repeated errors made in public sector rather than learning a lesson from them.

Read More: Proposed Changes in Private Sector IR35 Rules

Join the Stop Off-payroll Campaign

There is a much deserved campaign started by contractor calculator named “Stop the off payroll tax” in order to protect the livelihood of contractors. This campaign has two main objectives and they are as follows –

1. To stop introduction of off-payroll rules to the private sector
2. To urge the government to launch a system to review & analyse IR35 legislation and introduce a correct way to recognise contracting in the tax system.

We are urging people to become a part of this campaign so that the introduction of off payroll tax cannot be enforced into the private sector by April 2020. You can support this “Contractor calculator” campaign by signing up, writing to your area MP or contributing to the campaign fund by clicking the link below:

https://www.contractorcalculator.co.uk/stoptheoffpayrolltax

Come, join the campaign and stop the launching of off-payroll tax in the private sector

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.