Off-payroll working in the private sector

In 2000, the government introduced the off-payroll working rules known as IR35. These rules ensure that people working through a personal service company (PSC) who would have been employees if they had been engaged directly, pay broadly the same Income Tax and National Insurance contributions (NICs) as if they were employed.

We have estimated that only 10% of individuals working in this way apply the rules properly, costing the Exchequer hundreds of millions of pounds in lost tax revenues every year.

In April 2017, the government reformed these rules for engagements in the public sector, and early indications are that this has resulted in an increase in public sector compliance.

In the Autumn Budget 2017, the government announced it would consult on how to tackle non-compliance with the off-payroll working rules in the private sector, and we are asking for comments on the best way to do this.

Before you send your response, we recommend that you read the independent research into the early stages of the public sector reform, HM Treasury’s press release, and the factsheet that accompanies the consultation document below.