Off-payroll Working: Tax Yields
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the impact of the introduction of IR35 on tax receipts.
Answered by James Murray
The off-payroll working rules, also known as IR35, have been in place for over twenty years and are designed to ensure that individuals working like employees but through their own company, usually a personal service company (PSC), pay broadly the same income tax and National Insurance contributions (NICs) as those who are directly employed.
The reform to the off-payroll working rules in the private and voluntary sectors, introduced in April 2021, is estimated to have generated an additional £1.8 billion in tax revenue up to March 2022. Further details are set out in HMRC’s research report published on gov.uk in December 2022:
Impacts of the off-payroll working rules reform in the private and voluntary sectors - GOV.UK
HMRC has previously evaluated the public sector reform and estimated it generated around £525m between April 2017 and March 2019.
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