With the Autumn Budget having been announced by Chancellor of the Exchequer, Philip Hammond, PRISM has called out for the government to stop and think about extending IR35 rules.
With the Autumn Budget set to take place 22nd November, the non-profit making trade body for umbrella companies, PRISM has urged the government to think over any plans to extend IR35 rules to the private sector – a rumour that has been going around for a while now. Crawford Temple, CEO of PRISM, explained, “The IR35 legislation, as it stands, contains incentives and protections for both recruiters and workers to seek out providers who offer high-return but non-compliant solutions.
Since its introduction, we have seen an increase in non-compliant offerings, with many able to fold when approached by HMRC. “The regulation in its current form means it is highly unlikely that HMRC will be able to collect any taxes due from the non-compliant providers, and therefore, the anticipated tax gains will be significantly reduced.
Temple added, “Extending these rules to the private sector will exacerbate the problem and will not deliver the expected HMRC returns. The long-term answer is a structural reform of the tax system rather than a sticking plaster approach of tweaking rules.”