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Off-payroll Working Rules Review

Treasury – in the House of Commons on 11th February 2020.

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Photo of Jessica Morden Jessica Morden Opposition Whip (Commons)

What progress his Department is making on its review of the implementation of changes to the off-payroll working rules; and if he will make a statement.

Photo of Kate Green Kate Green Chair, Committee on Standards

What steps he is taking to review the implementation of changes to the off-payroll working rules; and if he will make a statement.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The review of the off-payroll working rules reform was announced on 7 January 2020. The reform is due to be extended to medium and large-sized organisations in all sectors from 6 April. It is determining whether any further steps can be taken to ensure smooth and successful implementation, and a series of roundtables with stake- holders have already been conducted. The review will conclude by mid-February, after which recommendations will be made public.

Photo of Jessica Morden Jessica Morden Opposition Whip (Commons)

With the roll-out of IR35 in the private sector fast approaching, there is already concern that companies are making blanket determinations, forcing genuine contractors into contracts that tax them as employees but with no employment rights. Ahead of the protest here tomorrow, will the Government listen, pause the process and work with the industry to do a proper review?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The hon. Lady may be aware that we have already made a small but important change to the roll-out as a result of the review. We are not aware of blanket determinations being made, although it must be said that many firms are choosing to acknowledge disguised employment and bring those contractors in-house. The hon. Lady should also be aware that there are various routes by which determinations can be challenged, including, if necessary, a submission under the income tax self-assessment process, for a final determination.

Photo of Kate Green Kate Green Chair, Committee on Standards

We all want to crack down on tax avoidance but legitimate contractors in my constituency face uncertainty about their status and tax liability thanks to unclear HMRC guidance and the unreliability of CEST—check employment status for tax—and the firms they work for are cancelling contracts because of the confusion. What is the Minister doing to address their concerns?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

We are conducting a review to ensure that this is as smooth as possible. We recognise that there is difficulty here. Some 18 months have passed since the original reform of status determination was announced and in that process we have had a consultation, draft legislation and further discussions and consultation, and we are having a further review now to make sure it is properly and smoothly rolled out.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

Against how many of the pillars of taxation did the Economic Affairs Committee in the other place judge the 2010 legislation on the loan charge to have failed?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

We have a question about the loan charge later on, so I look forward to my right hon. Friend’s further question then. He can answer on the number of pillars because I am sure he has scrutinised the Committee’s hearings very carefully. What I can tell him is that the fundamental principle of tax is that it should be properly collected from people who owe it and who may be avoiding it, and that is what this is designed to do.