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Lords committee invites contributions to inquiry into Off-Payroll Tax

The House of Lords Finance Bill Sub-Committee is calling for contributions from contractors, businesses and industry stakeholders to an inquiry into plans to extend the Off-Payroll Tax to the private sector, which has been announced two months ahead of the intended implementation date.

Experiences and opinions are being sought by the Sub-Committee, with the inquiry touching on a number of crucial issues, including HMRC’s impact assessment and the suitability of the Check Employment Status for Tax (CEST) tool.

“We are interested in how this change will work in practice, and how it relates to wider changes in working arrangements,” noted Lord Forsyth of Drumlean, chair of the Finance Bill Sub-Committee. “To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on Off-Payroll working rules, please let us know what you think.”

As ContractorCalculator CEO Dave Chaplin highlights, the Lords inquiry could represent the last opportunity for affected parties to influence change to the damaging proposals:

“With Government showing no intention of postponing the private sector implementation, those impacted have little time left to voice their experiences of this draconian legislation. We urge any party even remotely affected by the Off-Payroll Tax to contribute to this inquiry to enable the Lords committee to form an accurate representation of the private and public sector impact.”

What is to be covered in the Lords inquiry?

The inquiry invites parties to share their experiences and opinions about a number of contentious issues related to the Off-Payroll Tax, including:

  • The public sector experience of the April 2017 Off-Payroll changes
  • Views on whether the impact on the private sector has been adequately assessed
  • How HMRC can help companies better understand their compliance requirements
  • Opinions and evidence concerning the suitability of CEST
  • Views on the role of umbrella companies in the context of the proposals
  • Proposals for alternate measures to achieve Government’s objectives

The announcement comes one month after the Treasury announced its own review of the Off-Payroll Tax, amidst concern that insufficient research has been conducted by Government to justify the private sector rollout.

To date, the only Off-Payroll research commissioned by Government was a report into the public sector impact by IFF Research. The report was widely criticised by contracting stakeholders, with many arguing that the conclusions drawn were unrepresentative of the experiences and problems faced by those affected.

Affected parties have two weeks to submit evidence

“Since the 2017 public sector changes, and in the build-up to the private sector implementation, we’ve seen evidence of widespread disruption to projects and rife non-compliance with the Off-Payroll Tax amongst clients and agencies,” comments Chaplin.

“Posed with the same evidence from those affected, we struggle to see how the Finance Bill Sub-Committee could draw any conclusion other than the Off-Payroll legislation is not fit for purpose.”

Interested individuals have until 21 February 2020 to submit written evidence to the inquiry and can do so here. Once the Sub-Committee has concluded its inquiry, it will make recommendations in a report to the House of Lords.

Published: 06 February 2020

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