Conservatives must honour the IR35 review promise and halt the April 2020 Off-Payroll Tax roll-out
The Conservatives must honour the IR35 review promise made by Chancellor Sajid Javid during the election campaign and halt the April 2020 Off-Payroll Tax roll-out, with there being insufficient time to bring this in. That’s the message to the new Government from the Stop The Off-Payroll Tax campaign and thousands of UK contractors and freelancers, currently facing uncertainty as a result of the roll out plans in the last Parliament.
The announcement was made by Sajid Javid on BBC Radio 4 MoneyBox programme in an interview with Paul Lewis. He announced that the Conservatives would hold a review of IR35 as part of their review into self-employment. He didn’t clarify if that meant pausing the IR35 roll-out, hence we wrote to the Chancellor asking for this solid commitment.
A review would be meaningless without first pausing the rollout and with the new Government’s budget expected now in February or even March, after the planned exit of the UK from the EU, it entirely unreasonable to proceed with this damaging new tax on the flexible workforce. The sector is now urging the Chancellor to honour his pledge and give thousands of businesses and freelance workers certainty and halt the damaging effects that are seeing firms terminate contractors and slash pay rates, leaving many unable to find work.
During the election Stop The Off-Payroll Tax campaigners lobbied election candidates asking them to back the candidate commitment and made IR35 an election issue. Three parties, the Conservatives, SNP and Liberal Democrats all backed an IR35 review along with many candidates. The campaign is now calling on all elected candidates to support the UK’s flexible workforce and halt the proposed Off-Payroll Tax roll-out and instead conduct a proper review as to how best to recognise contracting and freelancing in the tax system. Some key Conservatives backing the calls to stop the Off-Payroll Tax were John Redwood, Grant Shapps, Nigel Evans, Crispin Blunt, Philip Davies and Julian Sturdy, all reelected as MPs, alongside new Conservative colleagues also supporting this.
The Off-Payroll Tax will damage business in the UK and will see many contractors and freelancers losing their jobs and (according to HMRC) over 150,000 being forced to accept lower pay of up to a quarter.
Commenting, Dave Chaplin, Director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator said:
“We congratulate the Conservatives on their success and now call on them to properly honour the commitment made by Sajid Javid to review IR35, which means halting the proposed IR35 Off-Payroll Tax rollout and properly assess how best to recognise contracting and freelancing in the tax system.
““The Conservatives have said they want to pursue a pro-business, low tax agenda to assist business, but to do this they must halt the roll-out of the Off-Payroll (IR35) tax, which Sajid Javid previously labelled as “silly” and which Conservatives historically opposed. Many firms are now offshoring British contracting jobs, which will hamper the country as Brexit is implemented next year.
“The contracting sector must now lobby all new MPs and urge them to support the UK’s flexible economy. Contracting and freelancing are hugely important to the nation and it’s time they were celebrated, not undermined. We urge contractors, freelancers and sector organisations to join our 2,000 campaigners and lobby every single election candidate, asking them to help stop the Off-Payroll Tax.”
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Notes to Editors
1. The Stop The Off-Payroll Tax campaign is a campaign on behalf of contractors and freelancers and supported by organisations and businesses in the sector. It was launched by ContractorCalculator in April this year and is supported by the Freelancer & Contractor Services Association (FCSA), the Forum of Private Business, IT Contracting, PRISM Trade Association and contracting sector businesses. It now has 2000 individuals signed up to the campaign and is calling on individuals and businesses to ask election candidates to back the Stop The Off-Payroll Tax campaign candidate commitment; to vote to stop the Off-Payroll Tax coming in; and to review how best to tax the contracting and freelancing sector. See https://stoptheoffpayrolltax.co.uk/
2. The Stop The Off-Payroll Tax candidate commitment asked candidates to do 3 simple things:
- To agree to oppose the roll-out of the IR35 ‘off-payroll’ rules – Off-Payroll Tax – roll-out and will do so if elected as MP in the next Parliament from 13th December 2019.
- To back a review into how contracting and freelancing should best be recognised in the tax system.
- To support and celebrate the contribution made by the UK’s 5 million self-employed people and to only back legislative changes that do this.