Off-payroll working: calculation of PAYE liability in cases of non-compliance

Consultation author


Our response published

21 June 2023

Executive summary

  • Overall, most AAT members consulted on these proposals welcomed them but differed in their views on the level of impact they would have. Several AAT members believed the impact would have limited benefit. There were a few members who opposed the policy, arguing it would not make the IR35 any easier for workers and would most likely complicate the system further.
  • Employer National Insurance contributions (NICs) should be considered in-scope of the proposed set-off. HMRC should consider the merits of expanding the set-off to include employer NICs in order to more effectively realise the benefits that arise from it.
  • HMRC should explore what other information its departments have that could improve their estimation of a set-off. HMRC already has lots of information to help it make judgements in this area, but it requires various departments improving their information sharing with one another. The worker should also be given sufficient time to provide the exact figures for tax and NICs already paid.
  • The cost and time-limited nature of appeals do not provide adequate safeguards in the view of AAT members. Several AAT members argued that appeals do not have reasonable timescales and that the cost of the process itself means only the wealthy can really access it.
  • HMRC should consider introducing a compulsory requirement for all paid-for accountants and tax advisers to join a recognised professional body to improve compliance with IR35 and the effectiveness of the new set-off. Two-thirds of complaints about tax come from the one-third of the profession which is unregulated. HMRC should consider how raising standards in this area, via a compulsory professional body membership requirement, could better help reach the consultation’s objectives.
Read our response (PDF)