Employment: Taxation

Treasury written question – answered on 4th October 2019.

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Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

To ask the Chancellor of the Exchequer, what assessment he has made of the number of contracting roles that will be lost to the UK economy as a result of the roll-out of the off-payroll rules.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

To ask the Chancellor of the Exchequer, what assessment he has made of the effect on pay rates of the roll-out of the off-payroll rules.

Photo of Jesse Norman Jesse Norman Financial Secretary to the Treasury and Paymaster General

The off-payroll working rules (sometimes known as IR35) have been in place since 2000. They are designed to ensure that individuals working like employees pay broadly the same amount of tax and NICs, regardless of the structure they work through. They do not affect the self-employed.

In 2017 the Government reformed the way the rules operate in the public sector in order to address widespread non-compliance. Evidence shows that compliance is improving, without reducing the flexibility of the labour market.

Budget 2018 announced that the reform would be extended to all sectors, but not until April 2020, giving businesses more time to prepare. The Government has consulted extensively on the reform and HMRC are rolling out guidance as well as an education and support programme.

On 11 July 2019, HMRC published a Tax Information and Impact Note setting out the costs to business and individuals of the reform. This can be found here: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020/rules-for-off-payroll-working-from-april-2020.

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