The Lords Select Committee has launched an investigation into the extension of IR35 rules to the private sector and is looking for evidence of it’s impact from contractors.
As part of their role to scrutinise the Finance Bill 2019/20, the Lords Finance Bill Sub-Committee will focus specifically on IR35 reform, which are due to come into force on 6 April 2020.
Lord Forsyth of Drumlean, Chair of the Finance Bill Sub-Committee, said the Committee is “interested in how this change will work in practice, and how it relates to wider changes in working arrangements.”
The investigation will remain open until 25 February, before the Lords’ IR35 inquiry takes into consideration the opinions of contractors and businesses affected by the reform.
“To inform or work we want to hear from as broad a range of people and organisations as possible. If you have a view on Off-Payroll working rules, please let us know what you think,” added Lord Forsyth.
The Government is also due to conclude it’s own IR35 review this month and has already made some recommendations, but the Lords said they intend to focus on a number of key areas for those affected by the change of rules.
In particular, the Committee will examine public sector IR35 reform, which was introduced in 2017. The Lords hopes to receive feedback on:
- What has been the experience of the new rules in the public sector?
- What lessons have been learned from this experience, and how have they affected the Finance Bill proposals?
The Lords will also put the following forward for discussion:
- Has the impact of the extension of the rules to the private sector been adequately assessed?
- Is the exclusion of small organisations sufficiently robust?
- What effect will these new measures have on a chain of contractors and sub-contractors?
- What should HM Revenue & Customs (HMRC) do to help businesses understand the new administrative rules?
The Lords also intend to uncover whether the changes to the Government’s Check Employment Status for Tax (CEST) tool have been sufficient to allow businesses to correctly identify those affected by IR35.
For more information and to contribute to the ongoing IR35 inquiry, please visit the Parliament website here.