The Chancellor’s most recent budget signalled the intention to shift liability for tax and IR35 compliance of public sector Personal Services Companies (PSCs) from worker to the engager. The consultation on the issue is scheduled to take place in late April / early May of this year, before the IR35 forum’s next meeting, which occurs on May 10th. Draft legislation is then to be expected in the Autumn Statement with the changes due in April 2017 set to replace the existing ‘assurance process’.
Whilst the government has made clear their plans to tackle perceived non-compliance in the public sector, for the moment at least, it seems the private sector will be spared. Despite being updated as recently as last year the government clearly does not believe the procedures public bodies follow to ensure their off-payroll staff pay the correct amount of tax are insufficient and so this (some believe drastic) overhaul is the next measure in hopefully allowing HMRC collect the revenue due to it.
Tax relief on T&S expenses (due to not being) Supervised, directed or controlled
Whilst the procedures for employers’ to comply with tax and IR35 liability are in the process of being outlined interestingly it seems the revenue does not believe the equally complex procedure whereby it is gauged whether a contractor is entitled to tax relief on Travel and Subsistence (T&S) expenses due to not being under Supervision, Direction or Control (SDC) needs further illumination. Indeed, HMRC has indicated no further guidance shall be given, believing the present guidelines to be satisfactory. Umbrella companies now understand they can go forward without the threat of new legislation acting essentially as a ‘PAYE brolly with no ongoing expenses’.