• 74% of contractor respondents who have used the Check Employment Status for Tax (CEST) tool believe it to be inaccurate • 64% of contractor respondents anticipate needing professional advice as a result of any reform within the private and third sectors • 69% of contractor respondents are not confident that their clients will have the capacity, knowledge or resources to be able to make a correct status determination • 56% of contractor respondents plan to only seek contracts in the private and voluntary sectors in which the off-payroll rules do not apply • 47% of contractor respondents believe that voluntary and charitable organisations will struggle to deliver IR35 reform with 44% believing that the Construction industry will also struggle significantly
Commenting on the joint response, Charles Cotton, senior CIPD adviser, performance and reward said:
“Based on what both payroll and HR practitioners and contractors have told us, the CIPD and CIPP strongly recommend that changes to the existing off-payroll working rules for engagements in the private sector will need to be implemented gradually to ensure that firms and the industry have enough time to amend their existing processes.”
In full agreement of the need to phase any changes in gradually and in recognition of the range of employer size and complexity within the Private Sector, Samantha Mann, CIPP senior policy and research officer highlighted:
“If the ‘preferred option’ is chosen then HMRC will share significant resource challenges to deliver knowledgeable customer service across all service lines together with information and materials that recognise the differing needs of the increased IR35 customer base.” “Our findings also confirm that whilst the CEST tool is largely seen to be an improvement on its predecessor, before further reform is considered, thorough user evidence research together with a review of how CEST operates and ideally through public consultation, should be carried out so as to increase the number of reliable determinations”
The full consultation response can be found in the Policy hub under My CIPP on our website.
(This news can also be found under Intermediaries)
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CIPP response to Consultation on Tax and administrative treatment of short term business visitors from overseas branches 13 August 2018 A consultation was published to consider two possible options of how change could be introduced to ease the administrative burden on employers dealing with the tax and administrative treatment of Short Term Business Visitors (STBV) from foreign permanent establishments (“overseas branches”) of UK companies.
In the consultation the government is considering two broad policy options aimed at realising improvements for UK companies:
1. Extending the PAYE special arrangement UK workday rule 2. A new tax exemption for STBVs from overseas branches
To provide feedback, over and above comments shared during an HMRC roundtable, the Policy team ran a survey of our members which ran throughout July. The survey findings, where relevant, are used to support our answers.
Summary conclusions
• The survey we ran to support this response received 10 responses in total, which is insignificant in contrast to the numbers that we would reasonably expect from our membership base and we know from other research that over 20% of our membership base manage international payrolls in addition to their UK payrolls.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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