Other measures published include a consultation on regulating umbrella companies and a consultation on the introduction of a new criminal offence for promoters of tax avoidance.
The government is looking for contributions for a technical consultation on a potential legislative change to address the over-collection of tax for off-payroll working.
This can arise from an incorrect employment status determination for off-payroll working purposes.
More on IR35:
Outside-IR35 contractor pursued by HMRC
Gary Lineker wins appeal against £4.9 million IR35 bill
2023 Spring Budget expectations
The proposed solution would allow HMRC to account for taxes already paid by an individual or their intermediary when calculating a PAYE liability when IR35 rules have been applied incorrectly.
This consultation is open until 22 June 2023.
Susan Ball, president of the Chartered Institute of Taxation (CIOT) said the consultation is long overdue.
She said: “The off-payroll working IR35 rules have been causing headaches for workers and hiring organisations for years now.
“If implemented, the new rules will not come into force until April 2024 and will not be applied retrospectively.
“This means hiring organisations may be tempted to drag their heels with any HMRC compliance checks in the meantime.”
IR35 reform in the private sector has been subject to scrutiny since it was introduced in 2021.
The government promised to scrap the legislation in 2022, but the decision was overturned when Jeremy Hunt became chancellor.
Seb Maley, CEO of tax advisor Qdos, said the updates are a positive step but need to be followed by decisive action.
Speaking to HR magazine, he said: “HMRC wants to simplify tax reporting for self-employed workers and businesses, ensure compliance and tackle the tax gap.
“While few will disagree with HMRC’s strategy, action speaks louder than words.
“The government has made countless promises over the years and rarely delivers in this area. Consultations, reviews and pledges to simplify the minefield that is tax are made all too often.”
