Analysis of loss of contracting work to offshore companies following changes to IR35

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Dear HM Revenue and Customs,

Research into unintended consequences of taxation changes.

It is widely understood that the Intermediaries Regulations known as IR35 are to be extended in April 2020 to bring all medium and large Clients in the 'private sector' under similar arrangements to those extended to Public Sector employers in 2017.

Although the intent of the regulations is such that contractors, referred to as PSC's (Personal Service Companies) should be individually assessed or where specific criteria are met 'group assessed' an unusually large number of larger private sector employers have chosen not to carry out any assessment but instead to eschew PSC entities entirely.

It is likely that many of the positions, particularly in Infitmation Technology (IT) formerly held by UK PSC will inevitably go to Offshore providers with a consequential loss of revenue to HMRC and 'UK Plc'

Please can you provide HMRC analysis of the number of IT positions and associated revenue that will be lost to overseas entities?

Yours faithfully, R Large

foi.team@hmrc.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

Our ref: FOI2020/00493

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foi.team@hmrc.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

1 Attachment

Dear Mr Large,

We are writing in response to your request for information, received 28
February.

Yours sincerely,

HMRC Freedom of Information Team