After much deliberation, HM Revenue & Customs (HMRC) has finally shed light on the future of IR35 tax legislation in the private sector.<\/p>\n
The consultation, which will \u201cmake sure that people who effectively work as employees pay the right amount of tax\u201d, was launched last week.<\/p>\n
This includes looking at how to increase compliance with the existing \u201coff-payroll\u201d working rules, known as IR35.<\/p>\n
Similar rules came into force in the public sector in April last year, affecting public authorities who hire off-payroll contractors. This had a major effect on organisations such as the BBC, which had been paying many of its on-screen stars via Personal Service Companies (PSCs). Both the staff and BBC were asked to repay any tax due.<\/p>\n
Recent evidence suggests that workers wrongly operating through a PSC could be costing the public fund \u00a31.2 billion a year by 2023 as a result of people paying the incorrect amount of tax.<\/p>\n
Financial Secretary to the Treasury, Mel Stride, said: \u201cIt\u2019s very important that we recognise the hard work of contractors across all sectors, who contribute to our growing economy.<\/p>\n
\u201cBut it\u2019s also right that we have a fair tax system that balances efficiency and simplicity for taxpayers, while also supporting our vital public services.<\/p>\n
\u201cThat\u2019s why we\u2019re consulting carefully and welcome a wide range of opinions and evidence on how to tackle non-compliance.\u201d<\/p>\n