This post is from February 2024. Please click here for more recent information.
As HMRC opens a new technical consultation to set out the mechanism that will prevent deemed employers – often the recruitment agency – from over paying tax where HMRC determine that there has been an error in applying the IR35 off-payroll working rules, the Association of Professional Staffing Companies (APSCo) has welcomed this ‘sensible’ approach.
This latest call for views on the proposed changes to off-payroll working regulations follows recent activity from HMRC as it looks to improve IR35 regulations. The consultation also outlines new recommendations for the appeals process.
Shazia Imtiaz, General Counsel at APSCo commented:
We welcome the recognition from HMRC that provisions are needed to allow any PAYE liability to be recovered from the deemed employer to be reduced by the taxes already paid by the worker. As we’ve previously highlighted, there are flaws within existing legislation that could see recruiters unfairly penalised financially. The introduction of a set off mechanism will correct the current unfairness and inequity caused by the over payment of tax where there has been an error in applying off-payroll working. APSCo has long lobbied for a set off mechanism to protect against this issue. We shall submit our detailed comments to HMRC’s technical consultation representing the views of our members in the professional staffing sector.