The government has confirmed people will not have to pay penalties for IR35 errors in the first year of the tax changes. Victoria Roythorne, Head of Compliance at one of the UK’s largest independent recruitment companies, Outsource UK, reacts to the news of the ‘light touch’ approach.
“For such a complicated piece of legislation, the HMRC’s confirmation of a ‘light touch’ approach to IR35 is a welcome sight. Most businesses have been working tirelessly to prepare for the change and it is only right that they are not held ransom for genuine mistakes that are made in the assessment process. It is a positive and respectful decision for businesses and contractors alike, and reflects the HMRC’s understanding of the ongoing uncertainty, in part due to the delay in the spring Budget and the lack of detailed information.
“Businesses must not mistake this soft period as a get-out clause. HMRC has been clear that deliberate non-compliance will still be targeted under the ‘light touch’ approach and failure to prepare adequately could be self-sabotage.
“The silver lining of IR35 for many businesses has been the opportunity to take a broader view of their talent community. Being receptive to a flexible workforce made up of different engagement models could be game-changing for those who have previously understood their only viable new hire options to be PSC or perm. For many businesses, this marks a new era of contingent resourcing.”
Outsource UK has identified the most significant changes in the HMRC’s IR35 report, to help businesses understand what lies ahead – https://www.outsource-uk.co.uk/blog/ir35-feb2020#.XlkIkqj7Q2x