IR35 employment status tax rules need clarification, says ATT

The Association of Taxation Technicians (ATT) has voiced concerns that changes to the IR35 employment status tax rules may result in workers losing part of their income.

The ATT said that the new rules, which apply from April 2017, offer no clear appeals process for workers who have been deemed employees rather than contractors by a public sector organisation. Such determination would require the worker’s company to deduct taxes under IR35 in a similar manner as they would for an employee.

Michael Steed, co-chair of ATT’s technical steering group said: “We urgently need clarity from the government on the new rules in respect of those workers contracted to work for a public body client through an intermediary.

“Shifting the liability to assess whether an engagement is akin to employment or self-employment to the public sector body may lead to some decisions that workers find arbitrary, inaccurate and unfair. It is disconcerting at this stage that there has been little debate or guidance on how such a worker can contest or appeal decisions of the public sector body.”

The ATT said it also had concerns about the “lack of clarity” surrounding national insurance payments and access to tax credits, as a result of the new changes.

“We are concerned that workers may not have the clarity on their tax responsibilities and rights before the changes go ahead in the public sector in April 2017 and this will set a worrying precedent if the changes are rolled out to the private sector in the same style in the future,” added Steed.

Related reading