FAQ 1: What happened on Wednesday 1st July 2020?
On 1st July 2020 it was the Report Stage of the Finance Bill 2019-2021, which had been making its way through Parliament. This day represented the last real opportunity to stop the roll out of the private sector reforms into the private sector for April 2021. After 4 years of campaigning, this was crunch time.
We asked MPs across all parties to vote Aye to Amendment 20, which was to force a two year delay to the roll out of the Off payroll rules to the private sector, and to allow for a proper review of how the flexible workforce is represented in both tax and employment law.
Whilst all the opposition parties opposed the Government, there were only 13 Conservative MPs who backed Amendment 20, and we needed at least 40 to swing the vote – which we were confident we had leading up to it.
This was a notable rebellion, particularly as the reforms themselves represented the large cash item on the Finance Bill analysis conducted by the Office of Budget Responsibility (OBR). But unfortunately there were not enough Conservative MPs prepared to finally breach their three-line whip, and take the courage to rebel. This included many who had indicated to their constituents that they were opposed to the measures.
FAQ 2: What can be done to stop the private sector roll out now?
After the Report Stage, the remaining stages pass through the rest of the Finance Bill stages fairly quickly, and are mostly ceremonial. The Lords do not have the power on Finance Bills to reverse the decision and therefore we cannot do anything further.
FAQ 3: Can the legislation be overturned?
In short, no it can’t be overturned. Once law enters into primary tax legislation, it does not get changed – for example, the original IR35 legislation (Chapter 8 of ITEPA) has been in existence for 20 years, despite long term opposition. It would be folly and somewhat dishonest to continue collecting contributions from campaigners based on false hope.
FAQ 4: Is this the end of the road for the Stop the Off-Payroll Campaign?
I’m afraid so, as things have come to a natural end.
Originating with the many years efforts by ContractorCalculator, and formally grouping in Feb 2019 under the Stop the Off Payroll Tax Campaign, we have worked tirelessly over the last four years to raise awareness of this issue and to get MPs to realise just how damaging it will be to the flexible workforce. It might feel that we have not achieved all that we hoped for, but eliciting a vote in Parliament on this matter was a huge achievement, especially since Labour had not been clear in supporting previously.
There is also now widespread acknowledgement of “zero-rights employment” and it’s on record how bad this legislation is, in the Lords Report.
FAQ 5: Why are we closing the campaign?
The primary reason for closing the campaign is that there is little point on trying to overturn primary legislation. The secondary reason is that we simply cannot afford the staff anymore, due to lack of funds. Much of our early campaign was funded by generous anonymous donations from supportive companies.
However, the later months have been solely funded by fantastic contributions from you. But, the reality is that the funding fell short each and every month, and ContractorCalculator funded the rest – something which is not sustainable. If there was a realistic possibility of overturning the reforms, then we would have carried on and tried to rally support from companies again.
FAQ 6: Could there be a judicial review?
The short answer is yes, but only if we have circa £250,000 behind us. Given regular contributions we received each month from contractors were in the region of £3,000 and fell considerably short of what we needed to fund the staff, raising funds of £250,000 is pie-in-the-sky territory. Besides, a judicial review would be unlikely to succeed, as we learnt 20 years ago when the then PCG attempted one.
FAQ 7: What did our campaign achieve?
- We are very proud to have become the leading campaigning voice on this issue.
- 3,868 supporters signed up to be part of the campaign.
- We organised two protest days outside the Houses of Parliament and two drop-in events for MPs. The July event trended on twitter.
- The Campaign helped to force a delay in 2019, and then later forced a delay from April 2020 to April 2021.
- Our investigative journalism and evidence assisted with the hugely powerful House of Lords Economic Affairs Committee Finance Bill Sub-Committee report.
- The Campaign resulted in multiple invitations to discuss Off-Payroll with Jesse Norman in person, and the head of the Off-Payroll Programme at HMRC. Those communication lines are still open.
- We achieved general election manifesto commitments from the SNP and the Liberal Democrats, which then pushed the Conservatives into promising a review.
- We were backed publicly by many other sector organisations.
- The Campaign galvanised over 70 individual pledges of support from MPs
- The Campaign collaborated closely with David Davis and other supportive MPs to table and push Amendment 20.
- The Campaign coordinated efforts to inform and educate the Finance Bill Committee.
- The Campaign created the message “Zero Rights Employment”, which accurately depicts the primary flaw in the legislation, crucial to galvanising cross party support.
- Ultimately we got a vote in Parliament, which all opposition Parties supported – and we managed a significant rebellion of Conservative MPs.
FAQ 8: Should I keep writing to my MP?
Absolutely. Just because we are stopping our formal campaign doesn’t mean that all those affected shouldn’t stop raising the folly of this policy. So do keep emailing your MP, especially as you yourself are affected by these changes.
If you have a Conservative MP who had expressed support, then gave in to the Whips and failed to support Amendment 20, then make clear how let down you feel – and challenge them why they did this having previously expressed support.
We do hope that supportive MPs will continue to raise the Off-Payroll Tax in the months to come and we hope they will push the Government to undertaking the review into self-employment, which should surely recommend a complete overhaul of IR35 and ensure all who are classed as “deemed employees” and taxed like employees also receive the same employment rights and benefits.
In the meantime, you will need to push yourselves to get those full set of rights if you are classed as “inside IR35”. It is now time to look at ensuring you comply with the legislation, you are knowledgeable about your rights, and you and the firms you work for are ready for April 2021.
FAQ 9: Is this the end for contracting?
We don’t believe it is the end of contracting, only that the sector has now been forced to bend and adapt. The new legislation may not be the outcome we hoped for but if you are prepared and negotiate a contract that is outside IR35 then you should not be adversely affected.
FAQ 10: How can I convince clients to hire outside IR35?
It is all about educating the market to be adequately prepared. The founders of this campaign and CEO of ContractorCalculator will continue to work with National and Trade press to get articles into the press on this topic, and will liaise with The Treasury to try and ensure that contractors and freelancers get the best possible representation. Between now and April 2021 end clients and hirers need to prepare for the roll out and avoid blanket assessing.
FAQ 11: Where can I find more resources/help?
Whilst we are no longer campaigning on this issue there are several sources of information and support that you can use.
- We believe that IPSE, the two decade long and established trade group for contractors will continue to lobby Parliament on IR35 matters, along with many other issues facing the self-employed. They do a great job, have circa 20,000 members, and are very well established.
- If you are a firm or contractor and would like to assess status and manage IR35 compliance matters, then please consider IR35 Shield, which continues to set the standard for IR35 compliance.
- To keep up to date with all contracting news visit ContractorCalculator website and register.
- If you’d like to follow Dave on LinkedIn please do so. He regularly posts useful items on IR35 – he’s rather obsessed by it.
- Learn about the new reforms by reading a copy of IR35 & Off-Payroll Explained, published by Dave Chaplin.