Many will be relieved that the government decided today not to extend the public sector IR35 rules to the private sector until April 2020.
“Whilst there was no suggestion that the delay is to consider other options, delay is very welcome” says Adrian Marlowe, Chairman of the Association of Recruitment Consultancies (ARC).
“This should allow time for a review of the position post Brexit as well as an opportunity for the government to complete its assessment of the employment status rules that were subject to consultations earlier this year. As IR35 relies on employment status tests, it makes sense to have those finalised before any further change.”
“Whilst the government is right to collect tax where it is being avoided, the current rules are confusing and give rise to unfairness in many cases not the least where contractors operate a genuine business that would normally be entitled to tax reliefs. We at ARC have argued for various alternatives, all of which would take the stress for hiring businesses out of the equation, and retain key points of principle.”
Marlowe concluded “ARC will continue to work with its members to attempt to influence change to a fairer system. We recommend that all recruitment businesses that supply contractors to the private sector should prepare well in advance.”
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