Today HMRC released its report following the off-payroll reform review process that it started a number of weeks ago. Unsurprisingly, there are no real changes or updates that will have any significant impact ahead of the April go-live – so it does feel more of a PR exercise. You can find the report here.
- HMRC has re-confirmed its intention for the initial 12 months to be a soft landing. It has stated that it will ensure that customers trying to comply with the legislation are not disadvantaged by those who are not, and it will focus on the most significant risks around non-compliance. It has also committed to taking a light-touch approach to penalties and that customers will not have to pay penalties for inaccuracies in the first 12 months – unless there is evidence of deliberate non-compliance. This just refers to penalties and we presume that the tax loss would still be payable, so provides little comfort around financial risk.
- HMRC has again stated that it is committed to not use information from the implementation of the reform to open historical inquiries into individual personal service companies unless there is reason to suspect fraud or criminal behaviour. The feedback we have had from our contractors so far is that many still have concerns about the tax risk should they continue working in a role that is determined inside. This is a key driver for many contractors leaving roles as a result of their determination, so this re-iteration of the HMRC position may help in this regard.
- Education is a big theme in the report; HMRC has committed to providing education and support – it has a team in place specifically focused on education and support of customers – offering one-to-one support for 2,000 large clients, writing to 43,000 medium businesses, providing factsheets, holding 18 workshops and 14 webinars….expect further guidance products to be released over the next few weeks.
- Wholly overseas organisations with no UK presence will be excluded from the legislation.
- There is now a requirement for end clients to confirm to agencies where they are exempt from the determination process due to their size i.e. small company exclusion.
If you have any questions around this then please do not hesitate to reach out.