Commenting on yesterday’s Spring Budget, Adrian Marlowe, chairman of the Association of Recruitment Consultancies said “It is now clear from the decision to raise NICs for self-employed workers that it is government policy to harmonise the tax differential between all workers.”

“We are disappointed that the Chancellor did not use the occasion to announce a thorough review of the different kinds of tax status, matched with different appropriately protective rights, as we have requested and which falls within the yet uncompleted Matthew Taylor review. The NICs measure would appear to be jumping the gun.”

Marlowe continues “Also of immediate concern is the growing evidence that the HMRC IR35 online tool, now renamed the Employment Status Service (ESS), is not fit for purpose and that it appears that HMRC is proceeding with Chapter 10 regardless.”

“The argument for Chapter 10 is that some contractors are engaged in tax avoidance but, as with the NICs issue, it would appear that tax reliefs normally available to businesses are being eroded wholesale as a result of this policy. ARC understands the tax avoidance argument but questions whether Chapter 10 is appropriately targeted.”

Marlowe concludes, “We do however welcome the government’s T levels initiative as this demonstrates commitment to improving the technical skills of young people which in time will end the perception that a technical career is seen a second rate career option.”

ARC’s lawyers have formally written to HMRC about the proposed IR35 rules expected to apply from 6 April 2017 amind concerns that aspects of the online tool “would either be unlawful or lead to unlawfulness.Read more…