Open letter from Gary Elden, CEO of SThree plc

A decision is expected next week on whether or not HMRC will introduce the IR35 Off Payroll Legislation to the private sector in April 2019.

Essentially, this legislation involves taxing certain types of contractors as if they are full time employees, but without giving them the benefits of being an employee – such as pensions, holiday pay, sick pay, etc.

This is legislation that was introduced to the public sector in April 2017. Since that time SThree plc has been very involved in advising clients and contractors on how to navigate their way through this massive legislative change.

Our data shows a number of negative outcomes in the public sector; many contracts (including NHS and government contracts) ran over budget and over time and some contractors increased their rates to cover the additional tax burden they faced or even took their skills out of the public sector by moving to the private sector or to jobs overseas.

As a compliant and responsible business, we are very supportive of HMRC’s efforts to ensure everyone pays the appropriate amount of tax. However, to introduce legislation with such wide-ranging implications for the private sector one month after the proposed divorce from Europe, would place an additional burden on businesses already concerned about the implications of the UK’s breakaway from the EU.

SThree is uniquely well placed to support businesses and contractors through the change if and when it is implemented – and is already working to educate clients to make the transition as smooth as possible.

However, to introduce such legislation at a time of unprecedented uncertainty in the UK workforce, would lead to increased confusion, and is not in the interests of UK PLC.

Therefore, I strongly urge the HMRC to reconsider any plans to introduce IR35 to the private sector until uncertainties surrounding Brexit have been resolved.

SThree is STEM’s leading recruiter, with offices in 40 cities in 16 countries.

Yours faithfully

Gary Elden

CEOSThree plc

Press enquiries to Heather Astbury – Head of Communications - [email protected]