George Osborne caused a bit of a scare for the freelancing and contracting community back in December when he announced a crackdown on “false self-employment” in the Autumn Statement. HMRC was quick to clarify that the new anti-avoidance scheme was designed to tackle large-scale, marketed tax avoidance schemes rather than increase IR35 activity targeted at the self-employed.
Despite assurances that one-person businesses will not be included in the new crackdown, there are still lingering concerns that legitimate freelancers and contractors could be caught in HMRC’s dragnet.
Following the launch of a Government consultation, the Association of Professional Staffing Companies (APSCo) has issued a response on the new scheme, saying that they do not believe the issue of false self-employment is a large-scale one within the staffing sector, and as such would fully support legislation designed to crack down on the practice.
The body has called on the Government to put in place protections for intermediaries, and issue a legal definition of “Personal Service Company”.
APSCo’s Head of External Affairs Samantha Hurley said:
“APSCo is very concerned that the proposed legislation has been drafted very widely and that the staffing industry is being asked to take on an unreasonable level of risk without any way of mitigating this.
“We will continue to engage with HMRC regarding our concerns and update our members accordingly. We would also like to thank all those who provided us with feedback on this issue –all of which have been taken into account within our response to the Government.”
Narrowing the scope of the crackdown would presumably lessen the risk of legitimately self-employed professionals being caught up in the campaign.