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The Freelancer & Contractor Services Association (FCSA) has welcomed an appeal by The Local Government Association (LGA), Chartered Institute of Public Finance and Accountancy (CIPFA) and Society of Local Authority Chief Executives (SOLACE) calling on HMRC to delay IR35 changes in the public sector due to come into effect on April 6th.
Julia Kermode, chief executive of the FCSA said: “Our sector is in disarray and the continued absence of HMRC’s digital employment status tool means that it is impossible for hirers in the public sector to get HMRC’s view of the IR35 status of their contractors. This is why we are seeing sweeping decisions being taken by some public sector bodies banning all workers who operate through their own limited company. Many contractors are simply deciding to leave the public sector, or seeking an increase in their rates, which in turn is exacerbating skills shortages and financial pressure in an already stretched public sector. HMRC has always said that these new changes would only affect non-compliant contractors, and would not impact on the flexibility of the workforce both of which are incorrect and not what we are seeing in reality on the ground.”
HMRC’s Employment Status Service (ESS) is due to be issued for public beta testing during week commencing 27 February, and will be officially “live” sometime after. HMRC will not stand by outcomes whilst it is still in test mode, meaning that the public will finally be able to access the tool, but not necessarily rely on the results initially. Kermode added: “I really hope that the voices of the LGA, CIPFA and SOLACE will be heard, and we fully support their cause. None of these changes would have been necessary if HMRC had properly enforced IR35 over the last 17 years. It is wrong to railroad badly planned legislation that effectively makes the public sector do HMRC’s job for them. It’s ill-thought through and is causing chaos.”