In our December issue, we told you about the HMRC/Treasury proposals to extend the IR35 tax rules. On March 5th, they published a consultation document; this is an open public consultation which closes on May 28th. They are inviting the submission of views on the new rules, and we encourage you to take part in this consultation process, because the new rules will have a substantial effect on most of our members.
We intend to contribute our views as an Institute, but direct submissions by individual members will help to influence the outcome. HMRC does not seem to have understood the extent of the effects on single-person consultancy businesses or on SME consultancies, and without input from our members they may well proceed with the proposed new rules without modifications. The HMRC document is presented in a somewhat misleading manner: it asserts that the 1.5 million smallest businesses will not be affected, but, as we understand it, that is only true for businesses that are buying services (such as consultancy), and is not true for businesses that are selling services. So your consultancy company will be affected by the new rules. Please do send your views to HMRC.
View the consultation document