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IR35 in the Private Sector

November 24, 2017 | By | No Comments

Good afternoon,

How has everyone’s week been? It has been a miserable week for weather here in South Wales, raining every day but at least today was slightly brighter. How has the weather been for everyone else?

Earlier this year we saw changes being made to IR35 in the public sector. It was previously the contractor’s responsibility to work out their IR35 status for each of their contracts in the private and public sector, although since April 2017 the government announced that changes would be made to the public sector and the end client would be carrying out the assessments instead.

We’ve seen a mixture of feedback since this change has taken place. Some of our contractors refused to take any contracts that were classed as ‘Inside IR35’ and moved into the private sector. We have had other contractors who when the change was first put in place would not consider contracts deemed Inside IR35 but have slowly made their way back into the public sector. There are also contractors who took in mind the change and had no issues and continued to work in the public sector on contracts deemed Inside IR35.

There have been rumours going around that the off-payroll working rules that we saw implemented in the public sector would be extended to the private sector. Earlier this week the ‘Autumn Budget 2017’ report was released and it was announced that the government will carefully consult on how to tackle non-compliance in the private sector and the result will be published in 2018. Below is a statement taken from the Budget report:

3.7 Off-payroll working in the private sector – The government reformed the off-payroll working rules (known as IR35) for engagements in the public sector in April 2017. Early indications are that public sector compliance is increasing as a result, and therefore a possible next step would be to extend the reforms to the private sector, to ensure individuals who effectively work as employees are taxed as employees even if they choose to structure their work through a company. It is right that the government take account of the needs of businesses and individuals who would implement any change. Therefore the government will carefully consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018.

EGB deal mainly with Government contracts in the public sector, therefore if this change is implemented into the Private Sector next year, it could potentially be good news for us and bring back contractors who decided that they would be moving away from the public sector earlier this year due to the change. Although contractors working in the private sector may not see the same side. What are your thoughts on this? Let us know in the comments below.

Have a great weekend.

Warm Regards,

Sheree

 

Sources: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661480/autumn_budget_2017_web.pdf

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