Following a discussion document published by Her Majesty’s Revenue & Customs (HMRC) in the summer regarding possible changes to the IR35 legislation, government sources now appear to have leaked proposed changes which are likely to be announced in the Autumn Statement due on the 25th November.

In the summer, the Association of Professional Staffing Companies (APSCo) responded to the discussion document and expressed grave concerns about the proposals which suggested that engagers (either employers or intermediaries) would be responsible – and therefore liable -  for deciding whether a contractor was subject to IR35 and forced to adopt the ‘supervision, direction or control’ test. 

 However, according to APSCo, HM Treasury sources have leaked a new proposal that suggests the decision has already been made and propose that contractors will only be able to work for one or two months before the engager has to apply the supervision, direction, or control test.

Samantha Hurley, Head of External Relations & Compliance at APSCo who is a member of the IR35 Forum, says:  “These leaked proposals show a wilful disregard for the concerns raised in APSCo’s and other stakeholder responses”.

“The key here is the appropriateness of the status test, which will be used to decide if a contractor is genuinely self-employed for tax purposes. One of the main recommendations that came out of the House of Lords Select Committee on PSCs [personal service company]  was that HMRC should liaise more closely with the IR35 forum to ensure that proper engagement with business and relevant stakeholders was taking place before any decisions were made…The consequences of an inappropriate status test could be devastating to the professional flexible labour market and UK plc.”

“APSCo will continue to lobby government on the two key aspects of the leaked proposals. First, we will point to the public sector’s own six month rule as a good precedent for a more reasonable time period in which to determine a contractor’s employment status and second we would want to ensure that any online tool to assess status is fit for purpose and doesn’t go the way of the Business Entity Tests which were such a disaster in the hands of HMRC.”