Recommendation 12

We asked HMRC about how it is addressing issues created by the implementation of reforms to the IR35 rules on off-payroll working. HMRC said that the reforms to IR35 shift the burden of determining employment status from workers to employers. HMRC told us that it provides tools and guidance to ensure employers can apply the correct tax treatment to their workers.38 We asked about the impact of the reforms on certain sectors, particularly the broadcasting sector, and the restrictions the rules were placing on people working as self-employed contractors. We also raised concerns that the complexity of the rules was driving some companies overseas.39 HMRC said that since the reforms, employers have moved between 150,000 and 200,000 people from being paid through personal service companies to being on the company’s payroll.40 It said it would be HM Treasury’s role to review the impact of IR35 as a policy, although HMRC keeps under review how it is administering the policy.41