IR35 "soft landing" period essential, warns AAT

6 February 2020

Calculator and pens over numerical paperwork.

As the Government's review of IR35 off-payrolling implementation draws to a close, AAT says that a "soft landing" period is essential.

Last month the UK's largest recruitment agencies including Reed, Adecco, Harvey Nash, Hays and Manpower, together with the Recruitment & Employment Federation, wrote to the Chancellor calling for implementation in 2021 instead of this April. The Federation of Small Businesses and contractors" representatives IPSE (Association of Independent Professionals and the Self-Employed) have similarly called for delay until 2021, as have other professional tax and accountancy bodies, including the Chartered Institute of Taxation, Association of Chartered Certified Accountants and Institute of Chartered Accountants in England and Wales.

AAT has taken a different position to other tax and accountancy bodies and is calling for a 12 month "soft landing" period until April 2021.

Brian Palmer, tax policy expert for AAT, said: "A delay to implementation would be AAT's preference but having already postponed IR35 once and with only weeks to go until IR35 takes effect in the private sector, AAT recognises it's highly unlikely that the Government will grant any further delay.

"As a result, the most realistic, sensible and helpful way forward is for the Government to confirm a 12 month "soft landing" period whereby no penalties or fines will be imposed on anyone who can demonstrate they have taken all reasonable steps to comply.

"This type of flexible safety net is essential in providing some certainty and reassurance to employers and contractors alike."