Source · Select Committees · Public Accounts Committee
Recommendation 4
4
We are not confident that HMRC works proactively to establish whether any sectors have been...
Conclusion
We are not confident that HMRC works proactively to establish whether any sectors have been affected disproportionately by the reforms and why. Issues in UK supply chains have been widely reported in recent months, for example in fuel and groceries. It is unclear to what extent the IR35 changes may have contributed to these by affecting hiring practices or decisions by contractors in key parts of the workforce. Particular concerns around difficulties in implementing the rules have also been raised by contractors in the broadcasting and IT sectors, and these issues may be compounded in areas that have seen changes to more flexible and ad-hoc working practices in recent years. We do not have confidence that HMRC is identifying which sectors may be disproportionately affected, nor that it is working proactively with affected sectors to understand what issues they are facing and how these might be addressed. Recommendation: HMRC should proactively identify and work with sectors that have been particularly affected to understand the challenges, establish how to address them and make it easier to comply. HMRC should write to us with an update in six months with the outcome of this public engagement.
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 4.2 HMRC undertook an extensive programme of customer education and support during the implementation of the reforms and continues to engage with stakeholders, including through the Employment Status and Intermediaries Forum. 4.3 HMRC has also already provided additional support to address inherent challenges faced by specific sectors where these have been identified. For example, it has produced sector-specific factsheets for the transport and construction sectors and has published guidance on umbrella companies in response to customer insight gathered from a range of sources. HMRC agrees there is value in building on this foundation and is committed to continuing to support customers with compliance – including at sector-specific level. 4.4 In addition, HMRC will develop and implement a stakeholder engagement strategy. This will set out how it will proactively engage with its stakeholders, to develop its understanding of the specific challenges faced by particular sectors. This will build on existing customer insight to inform targeted education and communications with the aim of further supporting customer compliance.