Contractors’ representatives from a range of industries have called on HMRC to delay or abandon the Off-Payroll Tax in favour of an alternative during an evidence session on off-payroll working rules reform held by Finance Bill Sub-Committee.

The evidence session, which could be seen here, featured a number of witnesses delivering presentations.

According to ContractorCalculator, poorly prepared businesses, insufficient education by the HMRC, uncertainty over status determinations and evidence of consequent widespread non-compliance were amongst the reasons cited by the experts and were central in their argument for abandonment. They also noted that a further delay of a year would be a minimum requirement.

Attendees stressed the need for access to an independent arbitration service or a fast-track route to the courts, while at the same time acknowledging the practical problem of implementing such a labour-intensive process.

The attendees also contested a claim by the HMRC that attributed a £550 million spike in public sector tax yield via Pay As You Earn (PAYE) to the legislation’s introduction.

Julia Kermode, Chief Executive, Freelancer and Contractor Services Association, said, ““HMRC has stated that the public sector reforms were successful and delivered an increase in compliance by virtue of the fact that more payroll tax was taken. This doesn’t demonstrate an increase in compliance. It simply demonstrates an increase in people being put on a payroll,”

According to ContractorCalculator, many of the experts called for a more holistic approach to the taxation of the self-employed where those made to work ‘inside IR35’ could at least secure the requisite employment rights.

Seb Maley, CEO of IR35 specialist Qdos, said, “The evidence put forward is another reminder of the government’s failings regarding IR35 reform. Despite HMRC’s insistence, public sector changes - introduced in 2017 - have not necessarily increased IR35 compliance. And even now, with less than two months to go, HMRC’s IR35 tool still isn’t fit for purpose.”

The evidence session featured representatives from the Confederation of British Industry, Federation of Small Businesses, Association of Independent Professionals and the Self-Employed, the Freelancer and Contractor Services Association as well as the Independent Health Professionals' Association Oil and Gas UK and the Producers Alliance for Cinema and Television.

New chancellor of the exchequer Rishi Sunak recently announced that enforcement by the HMRC is “not going to be at all heavy-handed,” for the first year of IR35’s implementation.