Employment: Taxation

(asked on 2nd September 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will meet with the hon. Member for Linlithgow and East Falkirk on the effect of the IR35 tax reforms on the personal finances of the flexible workforce living in Linlithgow and East Falkirk constituency.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 9th September 2019

The off-payroll working rules (sometimes known as IR35) have been in place since 2000. They ensure that individuals working like employees pay broadly the same amount of tax and NICs, regardless of the structure they work through. They do not affect the self-employed.

In 2017 the Government reformed the way the rules operate in the public sector to address widespread non-compliance. This shifted responsibility for determining whether the rules apply from contractors to the bodies that engage them. Evidence shows that compliance is improving without reducing the flexibility of the labour market.

Budget 2018 announced that the reform would be extended to all sectors, but not until April 2020 in order to provide more time for businesses to prepare. Small businesses have been excluded from the scope of the reform.

The change will improve compliance with the existing rules. Those who are compliant will feel little impact.

The Government has consulted extensively on the reform. HMRC have published guidance on how businesses can prepare ahead of April 2020, and is rolling out an education and support programme to help organisations make the right decisions.

Information on the number of people within scope of the off-payroll working rules is not held at constituency or regional level.

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