Public Sector: Off-payroll Working

Treasury written question – answered on 26th March 2020.

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Photo of Kate Griffiths Kate Griffiths Conservative, Burton

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of reducing IR35 rules for public sector workers.

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

In April 2017, the Government changed the off-payroll working rules for those working in the public sector, shifting responsibility for determining employment status from the worker’s own limited company to the organisation they work for. These existing rules continue to apply.

On 17 March 2020, the Government announced that the reform to the off-payroll working rules that would have applied for people contracting their services to large or medium-sized organisations outside the public sector, as well as engagers in the public sector, will be delayed for one year from 6 April 2020 until 6 April 2021. This is part of the additional support for businesses and individuals to deal with the economic impacts of COVID-19. Public authorities will not need to implement the changes on status determination statements or implement status disagreement processes until April 2021.

Independent research by IFF Research and Frontier Economics showed the reform to the off-payroll working rules in the public sector had not resulted in significant disruption to the sector, or to its use of contingent labour. During the recent review into the implementation of the reform, public sector bodies reported that they continued to engage people with specialist skills and had adapted their business models to comply with the reform.

The Government will continue to listen to stakeholders and monitor and evaluate the operation of the rules.

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