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HMRC IGNORING SELECT COMMITTEE RECOMMENDATIONS OVER IR35
Wilful disregard for House of Lords direction

Following reports in the national press from ‘government sources’ warning of a major crackdown on Personal Services Companies (PSCs), The Association of Professional Staffing Companies (APSCo) has spoken of a wilful disregard for the recommendations outlined in a report published by a House of Lords Select Committee set up to review the use of Personal Services Companies last year.

Government sources say that a new test forcing employers to become responsible for deciding how contractors should be treated for tax purposes will be announced in the autumn statement – yet another burden for UK plc. The reports centre on IR35 – tax legislation designed to tax disguised employment at a rate similar to employment.
Samantha Hurley, is Head of External Relations & Compliance at APSCo, and gave evidence to the select committee. She is also a member of the IR35 Forum – a group of external stakeholders who meet regularly with HMRC to improve and evaluate the way IR35 legislation is applied.

“One of the main recommendations that came out of the Select Committee was that HMRC should liaise more closely with the IR35 forum to ensure that proper engagement with business and relevant stakeholders was taking place before any decisions were made.

“HMRC has NOT been liaising with the forum in the way that they have been told to – and in the way that they told the House of Lords that they would. They have cancelled our next meeting and, as confirmed in a letter we have seen from David Gauke MP, Financial Secretary to the Treasury, have made decisions around an online digital service apparently to ‘help IR35 customers work out whether the rules apply to them.’ While this was mentioned in passing at a recent meeting as an idea, there has been no real discussion or consultation. It is patently clear that HMRC sees the forum as nothing more than window dressing – a tick box exercise to make them look good when in fact if there are any decisions to be made they simply close ranks and cease to engage. It is truly appalling behaviour.”

“We have already seen how disastrous the now defunct (at our recommendation) Business Entity Tests were in determining whether IR35 applied and without any consultation with the business community, this tool is destined to go the same way. It is also very interesting that the letter was sent just five days after the deadline for responses to HMRC’s so called ‘discussion document’ consultation around IR35 proposals which tends to suggests to me that they have already made their mind up and have simply run roughshod over any attempt at a proper consultation process.”

APSCo will be writing in the strongest possible terms to the House of Lords Liaison Committee to inform them of this wilful disregard.”

Tracey Barrett
BlueSky PR
01582 790702
tracey@bluesky-pr.com
0771 2281631

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