IR35 proposals are an ‘unwelcome burden’, say employers

Employers have spoken out against controversial changes to IR35 recently penned by HM Revenue & Customs (HMRC).

The new proposals, which would see employers from the public sector responsible for ensuring that third party contractors are paying the correct employment taxes, have been labelled “another burden” in a recent survey of private and public sector organisations.

HMRC’s own survey found that there was “general resistance” to the IR35 proposals.

Those surveyed told the tax authority that “another burden” was unwelcome in the “current economic climate”.

Respondents added that they were “cynical” about the need to shift compliance in the first place.

Commenting on the proposals, Chris Thomas, employment specialist at law firm Pinsent Masons, said: “This would impose a significant burden on employers who use temporary labour, not just in terms of higher PAYE costs but also the admin and management time required in working through tests which they are not necessarily well-placed to answer.

“There is a real risk that this could undermine the labour market flexibility which the government purportedly wants to promote.”

“There are also legitimate concerns that any ‘simpler’ test for determining employment status is likely to move the goalposts in favour of HMRC and result in a higher number of individuals falling under PAYE,” he added.