Source · Select Committees · Public Accounts Committee
Recommendation 18
18
In addition to understanding the impact of the reforms on the economy and workforce as...
Conclusion
In addition to understanding the impact of the reforms on the economy and workforce as a whole, it is also important to establish whether any sectors have been disproportionately affected and what additional guidance or support may be needed. For example, issues in UK supply chains have been widely reported in recent months, such as 28 Q40 29 C&AG’s Report, paras 3.7, 5.13 30 C&AG’s Report, para 3.4; House of Lords Economic Affairs Committee Finance Bill Sub-Committee Off-Payroll working: treating people fairly, 1st Report of Session 2019–21, HL Paper 50, 27 April 2020 31 Q40; C&AG’s Report, para 3.7 32 C&AG’s Report, para 3.9 33 Qq 40–41, 76 34 HMRC, Long term effects of the Off-Payroll working rules reform for public sector organisations, February 2022, para 1.35 35 Q75 12 Lessons from implementing IR35 reforms in fuel and groceries. There are particular concerns among IT contractors that they are missing out on contracts as a result of engagers wanting to avoid the process of assessing them for their IR35 status, and in some cases hiring overseas where the rules do not apply.36 There have also been concerns raised in the broadcasting sector, and we reported in April 2019 on problems the BBC faced implementing the reforms.37
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: We are not confident that HMRC works proactively to establish whether any sectors have been affected disproportionately by the reforms and why. 4: PAC 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. 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.