Oral Answers to Questions

John Baron Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Jesse Norman]

I remind the hon. Gentleman that there were other signs that indicated to people that they were in tax avoidance schemes—for example, a very low or relatively low effective rate of tax. The signs were there and people would have been right to pick up on them. Even if they were mis-sold, that does not have a bearing on the question of whether tax is now due.

[Mr John Baron (Basildon and Billericay) (Con)]

7. What steps his Department is taking to tackle stakeholders’ concerns on the roll-out of the off-payroll working rules to the private sector.

[The Financial Secretary to the Treasury (Jesse Norman)]

In response to stakeholder representations at Budget 2018, the Government announced that the extension of the off-payroll working rules reform would not take effect until April 2020. That was designed to allow organisations more time to prepare. The reform will also not apply to the smallest 1.5 million organisations. The Government have now consulted on the detailed design of the reform. Responses to that consultation will be taken into account when drafting the legislation.

[Mr Baron]

Nevertheless, there are concerns within the private sector about the forthcoming adoption of IR35. What lessons are there from its application to the public sector?

[Jesse Norman]

That is a very important question. I hope my hon. Friend will be reassured. Independent research shows that the public sector reform has been meeting its objective of improving compliance with existing off-payroll working rules without disrupting public services or reducing labour market flexibility. The Government recognise that the private sector is much more diverse, but HMRC will continue to work with stakeholders to improve employment status checks and associated guidance. It will also provide a significant package of education and support to businesses to help with implementation.