MPs raise the Off-Payroll Tax in Parliament but Minister’s answers expose lack of understanding
Two MPs raised the Off-Payroll Tax, the roll-out of the IR35 ‘off-payroll rules’ to the private sector, in Treasury questions yesterday.
John Baron, Conservative MP for Basildon and Billericay asked about the many concerns raised by stakeholders about the roll-out of the off-payroll working rules to the private sector and asked what lessons it has learned from its application to the public sector.
Martyn Day, SNP MP for Linlithgow and East Falkirk said that “the IR35 rule fails to equalise tax equally between them and employees, and is overly bureaucratic” and asked the Minister to “join me in urging the Chancellor to ensure that the 2019 Budget and Finance Bill improve the rule or scraps it altogether”.
The responses from the Minister, Financial Secretary to the Treasury Jesse Norman were in the same vein as those from his discredited predecessor, Mel Stride, giving a misleading impression to MPs about the reality of the proposals and the evidence surrounding them.
In reply to John Baron, Mr Norman referred to “independent research” that he claimed shows that the public sector reform has been meeting its objective of improving compliance with existing off-payroll working rules without disrupting public services or reducing labour market flexibility. But evidence clearly shows that this legislation has damaged public sector projects and led to staff shortages in the NHS, as well as driving some locum nurses and doctors out of the NHS altogether. The supposedly “independent research” was in fact research commissioned by HMRC who doctored the results and have since refused to say what information they have removed!
In response to Martyn Day, Jesse Norman ignored the concerns and bizarrely claimed that “this is a simplification of the rules, which is being carefully and deliberately handled” when the reality is that it is being forced through, despite the devastating impact in the public sector and despite the fact that the recent HMRC consultation showed overwhelming opposition to the plans and a damning assessment of its flaws. HMRC have a history of ignoring consultation findings and did so with the introduction of the Off-Payroll Tax to the public sector.
The link to the questions and answers on Hansard is here. Five other MPs also asked questions about the draconian Loan Charge, also part of the Government’s ‘War on Contracting’ and something that in itself happened due to the lack of clarity and flaws of the IR35 legislation.
Next Tuesday 9th July, the Stop The Off-Payroll Tax campaign is taking the message direct to MPs about the damaging Government plans to roll-out the Off-Payroll Tax to the private sector. Contractors and freelancers are being asked to email their MPs to request they attend a drop-in hosted by Paul Sweeney, MP for Glasgow North East and a Shadow Minister for Scotland and to lobby their own MP. More details of the Westminster lobby day are here. 29 MPs from across the House of Commons have so far supported a motion in Parliament calling for the Off-Payroll Tax roll-out to be halted.
Dave Chaplin, Director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator said:
“It is great that two MPs raised the Off-Payroll Tax in Parliament and expressed the serious concerns of thousands of contractors and freelancers up and down the country. We thank John Baron and Martyn Day for doing this and their support for the UK’s flexible workforce.”
“The responses from the new Minister, Jesse Norman were as disappointing as those of his discredited predecessor, Mel Stride. The evidence clearly shows the damage the Off-Payroll rules have done to the public sector, yet Mr Norman chooses to ignore this and peddle the myth that HMRC have conducted independent research. As he must know from the recent Freedom of Information request, HMRC doctored this research and have refused to say what information they have removed.”
“To suggest he and HMRC are working with stakeholders and the sector is absurd, the reality is he and they are ignoring their own consultation findings and are pushing forward with a policy they have been told is flawed and damaging. Jesse Norman can try to hoodwink MPs in the House of Commons, but he can’t kid thousands of contractors and freelancers, and the businesses who rely on them, who know that this Treasury is waging a war on contracting that must be stopped, starting with a halt to the Off-Payroll Tax roll-out”
Notes to editors
The Stop the Off-Payroll Tax was launched in May 2019 by ContractorCalculator, see https://www.stoptheoffpayrolltax.co.uk
The Westminster lobby day is on Tuesday 9th July 2:15-6:00pm