Umbrella Companies | IR35 Changes off the Table

IR35 Changes off the Table

It’s been a disappointing start to the year here at UCHQ. Not only is the intern still performing abysmally and is more concerned with her social media and planning her holidays than doing any actual work, but we are saddened to hear that the forthcoming review into any potential changes to the IR35 legalisation will not take place. This is despite all political parties and a number of industry groups all campaigning for it to be scrapped entirely or to face significant changes.

The news from HMRC is that they will only be considering how IR35 is implemented, rather than any changes being made. So, the bad news is that it will go ahead as planning, coming into force on April 6th.

The final legislation will be announced at the spring budget, which will give businesses, accountants and umbrella company providers only weeks to make the changes needed to their accounting practices and payroll systems.

What these changes will do is to open the door for less ethical umbrella companies (those unregulated and non-compliant) to capitalize on taking your money and possibly leaving you liable to future prosecution by HMRC. Many industry leaders are calling for improved legislation of umbrella companies as part of IR35 and we fully support that. It’s needed. There are plenty of cowboys out there and HMRC don’t always see you as the victim if you’ve not done your due diligence in choosing to work with an ethically sound umbrella company.

As part of a wider picture, the rush to get IR35 up and running, when we still don’t know where the goalposts are is foolhardy, and will inevitably lead to mistakes being made and new systems with all their teething problems needing to be brought in at a time when businesses are already having to make changes as a result of Brexit and how they trade and tax internationally.

It baffles us that HMRC and the government can’t see this is only going to cause chaos and we’re disappointed that despite all political parties promising to review the IR35 legislation in their manifesto, that it looks likely that HMRC will insist on steamrollering it through and expecting everyone to just get on with it. It’s a bit rich, when you consider how outdated many of their own processes and procedures are, isn’t it?

How long before they start legislating actual umbrellas?

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