Everyone has been on pins and needles over the feared government extension of the IR35 to the private sector. Recently, Chancellor Philip Hammond delivered the Autumn Budget for 2017 slipping in the proposed consultation on the extension. The budget indicated that this reform would be key to handling non-compliance in the private sector. The suggested reform would target workers seeking a haven from taxation and has been met with fervent pushback from workers and companies alike.
The Chancellor did not directly indicate that IR35 regulations would come under review in the Autumn Budget, but it confirmed that IR35 reform is indeed being called for consultation. Much success has already been seen with reform in the public sector with reports showing signs of “improved levels of compliance in the public sector, after contractors were relieved of responsibility for self-declaring their tax status.” (ComputerWeekly.com)
Advocates of IR35 reform quip that it could very well move any unspoken feelings of unfairness between employees in the public sector against employees in the private sector. Those opposing the reform worry that it will cause undue burden as SMEs and enterprises are forced to make these declarations for the first time. The opposition also worries that reform has had major damaging results - a vacating workforce, delays and cancellations, and the deterioration of public services.
It remains to be seen just how the government will handle IR35 reform to the private sector. One thing that both advocates and the opposition can agree on, the rules and regulations require a closer look and fine-tuning before they can be impinged on the private sector.