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Lords report a timely boost for contractors, says Optionis

Published today, the report by the Lords select committee on personal service companies calls on HMRC to provide clearer guidance on IR35.

It also recommends the creation of an official government guide laying out the differences between employment and self-employment.  

Optionis chief executive Rob Crossland / managing director Derek Kelly said, “As skilled, enterprising professionals who bring added value to businesses across the country, contractors and freelancers are the unsung heroes of the UK economy.

“It’s extremely refreshing to see some political support for contractors – as well as recognition of the challenges they can face when it comes to complying with complex legislation.

“The idea of a written guide to differentiate employment from self-employment is a common-sense step.

“However, it is unclear how such a guide would interact with the & lsquo;supervision, direction or control’ test included in the onshore employment intermediaries legislation.

“Indeed, it is ironic that the Lords’ call for greater clarity comes just as the new false self-employment measures – a source of confusion and anxiety for Limited company contractors – come into force.” 

The FCSA added, "FCSA today welcomed the publication of the report on Personal Service Companies. As a contributor to the Select Committee review process the report is a welcome reminder on the real value of the flexible workforce along with the desire to ensure true compliance is understood by all parties.

"FCSA support much of the recommendations tabled by the committee especially those recognising the challenges faced by contractors and freelancers in navigating complex legislation. We also echo the report’s view around the enforcement needed to ensure compliance is adhered to something at the core of what the FCSA stands for.

"FCSA chief executive Julia Kermode, commented, “The report aligns closely to the views we hold and the need for compliance to be effectively adhered to across the whole industry. We firmly believe that transparent and detailed compliance standards are the true differentiators between best and poor practice. Anyone engaged in the flexible workforce industry should place active compliance at the highest level.

“We urge all stake holders in the recruitment industry to embrace compliance as an advantage for long term sustainability and not simply a nice to have." (sic)

FCSA has published a detailed code of best practice since 2008 and much of the report recommendations are consistently addressed by the codes for Personal Company Advisors, Professional Employment Services and Self Employed Advisors.

Amanda Ciske, REC Policy Adviser, commented, “This is a useful report. We’re pleased that the House of Lords committee has taken on board our specific recommendation that the Business Entity Tests need greater clarification. However, we have to remember that HMRC has no official obligation to act on these recommendations, so we’ll have to wait and see what happens next.”


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