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HMRC publishes draft secondary IR35 legislation amid calls for further delays

Ahead of the reforms to off-payroll working rules, which will come into effect from April 6 2020, HMRC has published draft statutory instruments for technical comment.

REC CEO: The extension of IR35, as it currently stands, will punish ethical businesses
REC CEO: The extension of IR35, as it currently stands, will punish ethical businesses

The secondary legislation can be located here and outlines the amendments that are being made to PAYE and NIC regulations.


As widely discussed over recent months, the changes will shift the responsibility for operating IR35 rules from the worker’s Personal Service Company (PSC) to the medium or large-sized organisation they work for.


The draft legislation discusses the government’s plans in relation to the transfer of debt obligations where liabilities cannot be collected from the deemed employer within a reasonable period.


The draft legislation is open for consultation until February 19 and comments should be sent to


This comes shortly after the Recruitment & Employment Confederation (REC) and leaders from 14 recruitment firms wrote to Sajid Javid, chancellor of the exchequer, (January 20) expressing concerns about the planned changes to the IR35 rules.


The letter called for a delay of the legislation until 2021 including “a far more extensive rethink than the limited review set up recently” on the back of the commitment during the general election campaign.


The primary concern addressed in the letter was that the effective regulation of umbrella companies the government has promised will not be in place in time for April - creating “huge opportunities for avoidance”.


The stakeholders also said that compliant companies won’t have enough time to understand all the legislation, given the delays that have taken place, and will have insufficient time to work with their clients to get the approach right.


The letter called for an independent chair and body to review the off-payroll working rules and for an assessment of the public sector reforms to take place.


The letter concluded with the following statement: “Pushing ahead with tax legislation without a considerable review of its impact could severely damage the economy, compliant firms, workers and the tax take.”


Neil Carberry, chief executive of REC, said: “The extension of IR35 into the private sector, as it currently stands, will punish ethical businesses, harm workers and provide the environment for non-compliance to thrive. It’s always good to see further opportunities for engagement opening up, so we welcomed the review. But without a delay to implementation real change is impossible.”


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