The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
CIPP response to consultation on off-payroll working in the public sector 24 August 2016
The Policy and Research team has submitted their formal consultation response to ‘Off-payroll working in the public sector: reform of the intermediaries legislation’.
Background Budget 2016 announced proposals to reform the off-payroll rules for personal services companies working for a public sector engager. This consultation is about reforming the intermediaries legislation to improve its effectiveness in the public sector. It sought views on the impacts of this change and design details of the policy, including a new digital process to help determine whether an intermediary is in scope of the rules. Following on from the CIPP response to the 2015 consultation, ‘Intermediaries Legislation (IR35): discussion document’ we again reiterate that we respond from the viewpoint that use of a Personal Service Company (PSC) simply to gain a tax or NI advantage is unacceptable. We continue to support increased enforcement by HMRC that results in increased protection of vulnerable workers employed inappropriately through PSCs.
Summary of key findings
Our findings have been gathered from a mix of survey results (survey ran from 18 July to the 8 August 2016) and anecdotal evidence.
Definition of the public sector
The FOI Act and the FOI (Scotland) Act provides a definition that will result in a clearly recognised and consistent approach to defining and recognising public sector engagers.
Overwhelmingly there is support for private companies carrying out public functions to be included within this definition, in fact we would go further to say that subject to a satisfactory timeline for implementation (see below) we would look to see no sector or size of engager excluded.
There is evidence to suggest that all sectors and engager/employer sizes are at risk of non- compliance with IR35, and further more to exclude sectors adds a level of complexity to an already complex framework.
We believe that there should be a legal duty to disclose the information required by the end engager to enable the correct decisions to be made. There is evidence that confirms that if clearly defined and consistent rules don’t exist then the impetus to deliver/disclose information will not happen.
The Digital Tool should be backed by clearly defined expectations of what information is needed to be gathered – and by whom, and what information should be provided – and by whom.
Guidance should be unambiguous to enable engagers to adapt or establish for the first time processes and a clearly defined policy which should include reference to the digital tool.
Making the decision
On paper the decision flow chart appears to be asking the right questions with the right priority and to rule out engagements that are clearly out of scope, with the benefit of appearing to be simple to understand and use The reality however is rarely so straight forward and so we would hope that guidance is being developed that adds a little more depth and includes more working examples that an engager may come across. There should be a recognition that IR35 guidance will in the future be accessed by a far greater number of practitioners than it has in the past as the onus shifts from the small number of PSCs (and their professional advisers) to a wide range of engagers/employers with teams working in Payroll, HR and Finance and procurement departments. If all facts are known then the two parts of the decision flow chart do have the capacity to provide engagers with certainty on day one of the hire – in an ideal world. Processes will need to recognise that situations and answers may change over the course of time, and where they do the decision flow chart and tests may need to be revisited.
Also in an ideal world, this information and data will be collected as part of the procurement/pre-employment checks and certainly robust processes that are based on clearly defined and mandated rules will be needed.
Digital tool
A robust, reliable and consistent digital tool that is mandatory will be fundamental to the successful delivery of this proposal and we welcome HMRC's encouragement for expressions of interest and we would like to lodge our expression of interest at this point.
cipp.org.uk
Page 58 of 80
Made with FlippingBook Online document