Commenting, Dave Chaplin, CEO of tax compliance firm IR35 Shield said:
“Today’s report makes for very disappointing reading. After spending over four years since the consultation closed on 1st June 2018, the Government has carefully considered all 162 responses and published a 32-page document which effectively says,
‘We have decided to do nothing’.
“Curiously, against the backdrop of introducing the Off-payroll reforms, which, in April 2021, forced 60,000 businesses to assess the status of some half a million freelancers, the Government is now stating:
“..the benefits of creating a new framework for employment status are currently outweighed by the potential disruption associated with legislative reform. Although such reform could help bring clarity in the long term, it might create cost and uncertainty for businesses in the short term, at a time where they are focusing on recovering from the pandemic.”
“It appears to me that the Government has inadvertently admitted that it perhaps should have agreed to the proposed further 2-year delay before rolling out the Off-payroll reforms into the private sector, at the time when the country was mid-pandemic and is still recovering. In addition, the country is still reeling from the impact of Brexit. Off-payroll, Covid and Brexit have been punishing for the UK economy, and it seems the Government is only just waking up to that fact.
“On the final page, the report states “Now is not the right time to overhaul the employment status frameworks for rights and for tax”.
“Employment status is complex, and as previous Governments have done, this topic is being filed into the “too difficult to deal with” drawer.”