Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Since 2021, individuals have had the statutory right to raise a dispute with their hirer...
Conclusion
Since 2021, individuals have had the statutory right to raise a dispute with their hirer if they disagree with their status determination, and the hiring organisation must respond formally within 45 days. If both parties continue to disagree, the worker does not have an independent route for further appeal, but can seek a refund from HMRC by completing their self-assessment return with what they believe to be the correct tax treatment. There is no route for individuals to appeal past this point.15
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 2.2 The best result for workers, engagers and the Exchequer is where employment status is treated correctly from the start. The government remains confident that the reforms to the off-payroll working rules were the best way to achieve this. 2.3 There are established appeal routes for customers who disagree with tax assessments. The legislation creates an additional right for workers to challenge their employment status for tax determination with their client, who is required to respond within 45 days. 2.4 If a worker still disputes the determination, they can file their Self-Assessment return reflecting their own assessment. HMRC has 12 months from the date the return is received to open an enquiry, during which it may consider whether the employment status is correct. These enquiries can vary in length depending on their nature and complexity. HMRC will ensure this process is clearly set out in its guidance. Where HMRC disagrees with a customer’s Self-Assessment, all customers have the right to have the decision reviewed, and to appeal to an independent tribunal. 2.5 HMRC’s compliance activity already assesses the effectiveness of clients’ disagreement processes, and the outcome of any disagreements. HMRC will also monitor the number of customers who dispute their status through their Self-Assessment return and carry out checks to ensure the process is being used appropriately. 2.6 HMRC’s external research into the short-term impacts of the 2021 reform will provide details about the number of disputes clients are having with workers regarding their status determinations. This will be published, once completed.