The latest HMRC update had promised guidance and support for affected businesses. However, it failed to materialise and concern is growing amongst contractors’ private sector engagers regarding IR35 reforms.
Many are worried about becoming fully compliant with the new rules, whilst having to work through complex chains of various entities.
There are fears that HMRC isn’t doing enough and subsequently cannot be relied upon. And many in the industry have expressed their concerns about HMRC’s lack of preparation.
Speaking to Contractor UK, status advisory Qdos, said:
“HMRC isn’t doing enough to support the private sector as it prepares for IR35 reform.
With April 2020 rapidly approaching, this (the promised guidance package) should have happened months ago.
All the complex flow charts documented in the IR35 consultation were a bit of a red herring really, and failed to explicitly state which party would be on the hook if a status decision was overturned.
And are letters — which HMRC has apparently started sending out — going to do the trick? Arguably not. Therefore, my advice to private sector companies is not to rely on HMRC for genuine help when getting ready for reform.”
Just recently we wrote about contractors having a real lack of faith in the government, claiming they did not believe that it viewed their contributions as conducive to economic growth, with many saying they had no reason to believe that HMRC understands the negative impact of the IR35 reforms.
What can contractors do to prepare for IR35?
Adopting a wait and see approach isn’t the best idea, instead getting ahead of the IR35 changes will put you in a much better position.
Getting a Confirmation of Arrangements (CoA) document could make it more difficult for your client to change your status, on or after the reforms come into effect, but getting one isn’t a guarantee.
We outline in more detail how PSC contractors can prepare for the IR35 reforms here.
The changes in policy also mean many contractors are closing down their Personal Service Companies (PSCs) because they no longer need them – normally because they’re entering into full-time employment or retiring.
We’ve been helping thousands of contractors to close down their solvent companies with a Members’ Voluntary Liquidation (MVL) – which is a highly tax-efficient and HMRC-approved option.
You can contact us at Clarke Bell for your free initial advice to discuss your options: 0161 907 4044 / [email protected]