Source · Select Committees · Public Accounts Committee
Recommendation 17
17
HMRC has not carried out research into these types of wider impacts from the perspective...
Conclusion
HMRC has not carried out research into these types of wider impacts from the perspective of workers, and is not convinced by evidence provided by others even where this indicates there may be significant issues.33 In its own research, HMRC has also presented the reforms as a success despite consistently finding that significant minorities of people and businesses have been adversely affected. For example, in HMRC’s latest research into the impacts of the reforms impacts on public bodies, 19% of ‘sites’ (a single location of an organisation that administers its own payroll) and 34% of ‘central bodies’ (bodies providing payroll services for multiple locations or organisations) reported that they had found it more difficult to fill contractor vacancies since April 2017.34 When reporting its findings, HMRC focuses on the experience of the majority rather than the problems faced by the large minority.35 Understanding which sectors have been particularly affected
Government Response
Not Addressed
HM Government
Not Addressed
3. PAC conclusion: HMRC is not doing enough to understand the impact of the reforms on workers and labour markets. 3: PAC recommendation: HMRC should conduct and publish specific research into the impacts of the IR35 reforms on contractors and labour markets, to check it is being applied as intended and not adversely affecting employment opportunities. 3.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 3.2 Although the government agrees with the Committee’s recommendation, it disagrees with the Committee’s conclusion. 3.3 The government has already published research on the short and long-term impacts of the public sector reform and is committed to publishing research on the impacts of the reform in the private and voluntary sectors later this year. 3.4 A central part of the government’s research into the impacts of the off-payroll reforms is with client organisations, as they have the best understanding of the overall picture of how they are engaging off-payroll workers. This research gathers data on changes to the way off- payroll workers are engaged, and changes to their rates of pay and to the ease of recruitment. 3.5 The government is also already supplementing this with research with other parts of the supply chain: research with agencies was published in March 2021, and research with off- payroll workers will be published once complete. The research with off-payroll workers will primarily focus on tax information and advice but also gathers insight into the impacts of the off-payroll reforms. 3.6 In addition to research, HMRC is conducting internal analysis to identify off-payroll workers who may have been affected by the reforms, and what changes may have occurred in the labour market following the reforms. This will be published once complete.