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APSCO Raise Concerns about Extending Off-Payroll Working to the Private Sector

Following the publication of an HMRC/HMT consultation on off-payroll working in the private sector, the Association of Professional Staffing Companies (APSCo) has reaffirmed its concerns around extending the public sector off-payroll rules.

The trade body has also raised questions around how the Government’s independent research on the impact of off-payroll reform in the public sector – which was undertaken by IFF Research and Frontier Economics – is presented alongside the consultation.

Previous research by APSCo found that 45% of professional recruitment consultancies have witnessed the costs of resourcing contractors within the public sector increasing since the new rules were introduced. Of these, 46% reported that rate rises were in excess of 15%. Furthermore, 78% of respondents agreed that the extension of the IR35 off-payroll rules to the private sector will impact the ability of the UK economy to source flexible labour.

Responding to the publication of the consultation, Samantha Hurley, Director of Operations at the Association of Professional Staffing Companies (APSCo), said:

“We have now fully briefed our members on the consultation. Although we welcome the opportunity for all stakeholders to consult, we at APSCo feel that the consultation has been written in a fairly leading way and, in our opinion, the manner in which this has been presented gives little alternative to the Government’s preferred option to extend the off-payroll rules to the private sector. 

“Our own research undertaken with our members – which HMRC has largely labelled as anecdotal – does not reflect the findings of the research undertaken with public bodies. 

“The consultation document and accompanying collateral also gloss over any negative feedback by burying it below the headline findings. For example, almost a third (28%) of central bodies surveyed for HMRC’s research reported that the reforms had led to them increasing the gross hourly rates paid to off-payroll contractors. However, it was not recorded how significant these rises were, and this was not highlighted in HMRC’s easily digestible factsheet. 

“Like our members, we believe that extending these rules to the private sector will have an adverse impact on the strength of the UK’s labour market and wider economy and we will be working closely with our members and liaising with HMRC and other IR35 Forum members on our response to this consultation.”