The Association of Taxation Technicians (ATT) has called for ‘urgent clarity’ on next April’s changes to the off-payroll working rules.
From April 2020, HMRC intends to extend off-payroll working rules, known as IR35, to private sector contractors who work for medium and large businesses.
IR35 applies to individuals who provide their personal services via an ‘intermediary’. An intermediary may be another individual, a partnership, an unincorporated association or a company; however, the most common structure is a worker providing their services via their own company – known as ‘personal service companies’ (PSCs).
The rules are specifically designed to prevent the avoidance of tax and national insurance contributions (NICs) by those using PSCs and partnerships, and were introduced to the public sector in 2017.
In a submission to HMRC, the ATT outlined its concerns in regard to the ‘lack of detail’ on the changes in the Finance Bill 2019-20 draft legislation.
‘Uncertainty in how the off-payroll rules will operate in practice is making it difficult for businesses to make adequate preparations,’ said Michael Steed, Co-chair of the Technical Steering Group at the ATT.
‘These changes come in from next April, which means that businesses now have only about six months to get ready – and this at a time when many may also be preparing for or responding to the implications of Brexit.’
The ATT has urged HMRC to release more information and detailed guidance ‘as soon as possible’.