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FCSA responds to HMRC’s review of off-payroll implementation

Today, February 27, 2020, HMRC published its review of off-payroll implementation, legislation which is due to come into effect this April. Read Julia Kermode’s response on behalf of the FCSA:

“The FCSA welcomes confirmation from HMRC of the Chancellor’s promised ‘soft landing’ in respect on the off-payroll reforms, particularly as there is mounting evidence that clients have been unable to fully prepare in advance of the April 2020 changes. However, we are cautious that this may cause more confusion if clients and contractors are misled into thinking that the legislation has been delayed or will not be enforced.

We have confirmed with HMRC that the soft landing is genuine and that penalties won’t ordinarily be applied for the first 12-months of implementing the reforms. This is good news because HMRC’s education programme was delayed due to the general election, so a number of businesses are only finding out about the reforms and their new liabilities now, just weeks before the legislation comes into effect.  However, the soft landing does not mean that businesses and individuals can plan to ignore the changes because HMRC has also confirmed that penalties will be applied where there is deliberate non-compliance.

FCSA also welcomes the clarity regarding overseas clients being out of scope, plus the amendment requiring clients to confirm whether or not they are small so that the supply chain can ascertain if the new off-payroll rules apply.

It has been clear to me for some time that HMRC has been hellbent on planning to implement the off-payroll reforms this April come what may, and the publication of their review clearly shows that these reforms are coming whether we like it or not. I can’t see the budget on 11 March bringing about a u-turn, so it would seem that the House of Lords inquiry into the legislation is the last hope to affect any meaningful change.

Having given evidence to the House of Lords this week, it was clear that they were listening to the various representations, and, I did get the distinct impression that they were not supportive of the legislation. Time will tell as to whether or not they can make a difference but, in the meantime, I would strongly urge everyone to prepare for the reforms as penalties will still be issued for deliberate non-compliance.”