UPDATED 15 OCTOBER 2020: HMRC issues statement on “Off-payroll working from 6 April 2021– interpretation of section 61O and the conditions where the intermediary is a company” – click here to read >
The FCSA’s CEO, Phil Pluck, and Chair, Chris James today had a very positive and constructive meeting with HMRC officials regarding the recent issues emerging out of off-payroll reforms.
In summary, they accepted that there is a clear problem with the legislation as it currently stands, surrounding the definition of ‘intermediaries’ and the resulting impact on who is and isn’t required to make payroll deductions from payments moving through the supply chain.
HMRC has accepted that it was never an intention of the reforms to stop a compliant umbrella company from operating as it does today when the new rules come into effect.
HMRC will be working swiftly to address the issues and share our view that primary legislation via the Finance Bill is almost certainly the route to doing so. In the meantime, they fully understand that the sector needs reassurance and, as a result, will be issuing a statement tomorrow to acknowledge the need to reassure the market and its contractors.
HMRC has also indicated that they are keen to progress any draft amendments to the legislation in consultation with the FCSA.
FCSA, on behalf of its members, is delighted that HMRC is treating this matter with urgency, and we have come away with a very real sense of confidence that the matter will be resolved in advance of the IR35 changes next year.