Off-Payroll Repeal: the dust has not yet settled and the scaremongering has begun

Early October 2022 – what are we seeing?

The joy felt by so many following the Government’s announcement that they are repealing the Chapter 10 Off-Payroll Working (OPW) rules is beginning to subside.  There are three main reasons for this:

  1. Will the rules definitely be repealed? With the up-coming November Budget and government already making U-turns on significant proposals in their “mini budget”, we remain hopeful but nothing is yet set in stone.
  2. All affected parties, in both the private and public sectors, such as hirers/engagers, umbrella companies, agencies, accountants and IR35 specialists are assessing how the repeal could impact on their businesses.
  3. Contractors who have been affected by the OPW rules such as those currently having to use an umbrella company, those in possession of an inside IR35 SDS from their client or those moving back and forth from umbrella to PSC, are probably worrying about their own complicated situation come April 2023.
Beware scaremongering

At this stage no one knows how the repeal of the OPW rules will work and many commentators are using their crystal balls to suggest that there will be new rules for contractors to complete SDS’, that end clients will continue to rule on IR35 status, that blanket bans on using PSC’s will continue and that HMRC will declare some sort of amnesty to name just a few.  These are only opinions at this stage and should be taken as nothing more.

It is impossible to make concrete plans, yet.

Until the detail of the repeal is published via the Finance Act, all that folk can do is consider scenarios that may be realistic and try to prepare and plan accordingly. There has been further guidance promised by HMRC for contractors who are unfamiliar with IR35 but this will most likely involve referring people to the existing guidance, as a simple repeal with no changes will leave everything as it has been since April 2000.

What can you do in the next six months?

Every part of the contracting chain needs to use this time to analyse the effects on their own businesses and it is vital that all get up to speed with IR35 mark one.  We have seen many “IR35 experts” born since the advent of the OPW rules who have no experience of IR35, which should stand them in good stead especially, as the only thing that may change is who makes the IR35 decision and who is liable for getting that decision wrong. We must continue to work with the same case law precedent and keep a keen eye on the cases going through the Tribunals and Courts.

What is the best advice for Contractors over the next six months?
  • Keep up to speed with IR35 and contractor news for any developments.
  • Think about what you would want to do if it was possible.
  • Ensure you keep hold of all supporting evidence such as client SDS’, tool outputs, correspondence with your client/s and evidence of any independent contract and working practices reviews and outcomes.
  • Establish your personal circumstances now so you are aware of your options and possible risks, and if a change is realistic.
  • Discuss IR35 and the repeal with your client/s to establish what their stance may be from April 2023, particularly if you are working with an organisation that currently does not accept PSC contractors.
  • Finally, only seek advice from experienced and reputable specialists who have worked with IR35 and all of its changes since its inception in 2000, ideally those with a proven track record of successfully defending IR35 HMRC investigations.
To summarise, use the next 6 months wisely to ensure you are fully prepared for April 2023 wherever you sit in the contractual chain.  Contact us today if you need expert advice or guidance.