PAYROLL INSIGHT
timely guidance for everyone impacted by any changes. Ian Holloway: If this is to be rolled-out to the private sector, an announcement at autumn Budget 2017 will be far too late for employers to be able to prepare for 2018–19. The earliest that this could be rolled-out to the private sector and ensure that employers are fully aware of the implications is for an announcement at autumn Budget 2017 for 2019–20. Such a lead time will also allow HMRC to adapt their systems to accept a ‘deemed employee’ flag in RTI submissions that will supress things like SL1s. I think that it will be interesting to see whether any case law is established before a further roll-out of off-payroll to the private sector. To many, it is questionable that these individuals are put onto the payroll for the purposes of tax and National Insurance contributions (and apprenticeship levy) but are ineligible to receive any employment rights and are excluded from auto-enrolment and student loans deductions. Possibly, Matthew Taylor’s independent review of employment practices will highlight this, even if it was not specifically mentioned in his terms of reference. In general, there is not sufficient lead time for significant new regimes. The exception here would be the apprenticeship levy. Employers and software providers need to be provided with sufficient time to make the changes, understand them and communicate them in the workplace. Consultation and discussion with the relevant people must always be a priority and I am aware that HMRC place high regard on this concept. Further, it must be wide-ranging and cover all parts of the UK with equal priority recognising that, say, Wales is just as important as London. Jas Jhooty: We do not envisage a gentle introduction of an extension of these new intermediaries rules into the private sector. Forward thinking private sector companies should await the results of Matthew Taylor’s review on modern employment practices expected to be published just after the general election, and then start preparing for the inevitable extension of these new intermediaries rules. David Paul: The Finance Bill containing these provisions was issued on 20 March 2017 and was being debated weeks after the implementation date. The changes are
already having unintended consequences for businesses which never imagined they would be affected. There is a consensus that the lead time has been particularly tight. There are a number of other recent legislative changes such as the optional remuneration arrangements legislation, where businesses feel that the lead time and guidance issued did not provide sufficient notice to those affected stakeholders. Do you think there is a significant transformation occurring in the way government and society perceive self-employment? If there is such a transformation underway, do you foresee a time when everyone who uses the services of another (e.g. monthly window cleaner) becomes an employer? Neil Tonks: I think some in government may wish for this, but it’s not practical. The idea that everyone employing a window cleaner or jobbing gardener, or using a taxi service such as Uber, will register as an employer and submit RTI is not going to happen, realistically. What will happen, I think, is that the government will seek to bring more of the ‘gig economy’ areas into the realm of employment. Duncan Groves: Hammond’s budget speech hinted at a significant transformation but the u-turn on Class 4 NICs seems to have set back the transformation considerably. There will never be a system where everyone is ‘employed’ – we still live in a capitalist society! Helen Hargreaves: Recent court cases such as that of Uber workers show that there is a shift in perception. Yet Mathew Taylor’s review into modern employment practices, due to report very shortly, highlights that the way we work is changing, with business innovation, technological advances and lifestyle choices bringing increased flexibility, many
Jas Jhooty, director, emTax Ltd
its wider ramifications. The rushed implementation date along with there being no effective tool to aid public sector bodies has left many of our clients struggling to meet the new demands placed on them. It has also lead to a mass exodus of contractors leaving the public sector resulting in numerous government projects that will now not be able to be completed effectively e.g. HMRC’s ESS being a case in point! Granted there was a continuing problem of increased losses of revenue to the Exchequer by false self-employment and individuals hiding behind the veil of incorporation that this legislation will finally solve, but a more staged implementation will definitely have helped matters. What sort of lead time might be appropriate? And do you think government is giving sufficient lead in time for implementing new regimes and ensuring that all areas of tax administration are consulted with before timetables are set? Duncan Groves: Regarding lead times generally, I think there could have been more, but many organisations simply don’t react fast enough to cope with the changes. So, even if the changes were taking place in April 2018, I suspect many bodies would not have made a start on planning changes until the month before. Helen Hargreaves: When thinking about lead in times, common sense suggests the longer the better; however, the current pace and volume of change in legislation is in danger of overwhelming employers. There seems to be an unseemly rush to get legislation passed, whilst the timescale for responding to consultations is shortened. Allowing a longer more participative consultation process will enable the government to introduce well-thought-out legislation and gives departments such as HMRC the time to develop clear and comprehensive technical specifications for payroll software developers along with
David Paul, executive director People Advisory Services, Ernst & Young LLP
| Professional in Payroll, Pensions and Reward | July/August 2017 | Issue 32 24
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