Select committee: Finance Bill Sub-Committee
Conclusion 22
1st Report - Off-payroll working: treating people fairly
Published 27 Apr 2020
Paragraph 125
Finance Bill Sub-Committee Draft Finance Bill 2019 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
We agree with our witnesses that revenue-raising is the major driver of the proposed changes. According to HMRC’s own forecasts, improved compliance could bring as much as £4.1 billion by 2024/25 to the Exchequer. The value of this potential tax take requires any measures to improve compliance to work effectively for contractors, clients and HMRC.
From: Finance Bill Sub-Committee, 1st Report - Off-payroll working: treating people fairly, paragraph 125, 27 April 2020
Government response
The government responded to the whole report on 26 June 2020 (deadline 27 June 2020).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government says it remains committed to introducing the off-payroll working reform on 6 April 2021, while agreeing with the Sub-Committee that the delay "should be used productively and effectively".
- It does not accept the Sub-Committee's suggestion to wait until October 2020 before announcing whether the reform goes ahead, saying that doing so "would create uncertainty".
- On research, it intends to make independent research on the long-term effects of the 2017 public sector reform available before April 2021. On the Sub-Committee's call to defer private sector research to 18 months, it says early research matters but that it "will consider how best" to monitor impact over time.
- It "disagrees" with the Sub-Committee's view that the CEST tool is not fit for purpose, citing HMRC's investment and testing against case law, though HMRC are "actively considering" further support for users who receive an "unable to determine" outcome.
- HMRC will review the estimated administrative burden on businesses and will "publish the revised administrative burden costs at the next fiscal event". It will also use the delay to complete an evaluation of its education and support offer, which will inform an enhanced programme of targeted support ahead of April 2021.