Chancellor lets down contractors and freelancers by phoney promise to review IR35
The Stop The Off-Payroll Tax campaign have slammed the Chancellor and the Government, who have ignored the huge concern and have announced they intend to roll-out the flawed IR35 legislation to the private sector in April, despite this only being 12 weeks away. The whole contracting and freelancing sector has responded to this with dismay and criticised the Chancellor for not honouring his commitment to have a review of IR35 policy as part of the Conservatives planned review into self-employment.
Instead, the Treasury have announced a mere consultation and an unreasonably rushed one, into the changes which are going ahead anyway, making a farce of any pretence that it will pause and reconsider the policy. This was made clear by Financial Secretary to the Treasury Jesse Norman who stated, “The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.” It seems clear that this consultation, which will be the third consultation – with the Treasury and HMRC ignoring the concerns raised in the two previous ones!
It is now clear, as many in the sector feared, that the IR35 review commitment made by Chancellor Sajid Javid during the election campaign was a cynical election ploy made due to the pressure from campaigners and with other parties and candidates making commitments on the issue. A review of IR35 is meaningless without first pausing the rollout and a rushed consultation does not the Chancellor has kept his word. The Chancellor had clearly promised that the IR35 review would be part of the wide-ranging review into self-employment, which this review is not. Sajid Javid has broken his promise. The original announcement was made by Sajid Javid on BBC Radio 4 MoneyBox programme in an interview with Paul Lewis.
The Stop The Off-Payroll Tax campaign are now calling on the whole sector and contractors and freelancers countrywide to visit their MP and plead with them to push for changes to stop the decimation of the UK’s contracting and freelancing sector. Already many large companies are laying off contractors and according to HMRC’s own figures, at least 150,000 thousand contractors will face a pay cut of up to a quarter, pushing some into financial difficulty. Several firms are moving work to other countries, meaning a loss or jobs and tax to the UK. All of this, at the same time the UK leaves the EU, when the Government should be doing all it can to support the UK economy, including the UK’s flexible workforce, but instead they are intent on decimating it.
During the election Stop The Off-Payroll Tax campaigners lobbied election candidates asking them to back the candidate commitment to oppose the Off-Payroll Tax roll-out. The Liberal Democrats and SNP backed an IR35 review and the Liberal Democrat spokesperson Ed Davey made clear his party would halt the roll-out to allow a proper review. The commitment was also supported by Conservative candidates, now elected to Parliament Some key Conservatives backing the calls to stop the Off-Payroll Tax were John Redwood, Nigel Evans, Crispin Blunt, Philip Davies and Julian Sturdy, all reelected as MPs, alongside new Conservative colleagues all pledged to oppose the roll-out.
Commenting, Dave Chaplin, Director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator said:
“The sad reality is that the Chancellor duped the sector and has now broken his word to deliver an IR35 review as part of the Conservatives review into self-employment. He takes people for fools if he thinks he can pretend he’s delivered this through a rushed whitewash consultation on changes going ahead anyway. He has clearly backtracked.
“Pushing ahead with the Off-Payroll Tax roll-out is absurd at this crucial time. As we leave the EU, reliance on a flourishing flexible workforce will be vital – yet the Chancellor has decided to strangulate it. With the Budget happening a few weeks before the proposed change, it is wholly unreasonable to be forcing this through and strong sign that the Conservative Government is continuing its war on contracting. MPs who actually support the UK’s flexible workforce and workers must oppose this”.
“There is still time to persuade MPs to push hard for changes at least to soften the blow. We know from our Stop the Off-Payroll Tax campaigners that the Chancellor of the Exchequer has been heavily lobbied on this by his own concerned MPs, so there is strong opposition in Parliament to the April roll-out, including on the Conservative benches. We also expect all those MPs who promised constituents they would oppose the April roll-out to actually do so and to show that, unlike the Chancellor, they can be relied on to keep their word”.
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