ContractorUK reader’s IR35 petition awaits government response

An ‘IR35 petition’ calling for the repeal of the public sector reforms of 2017 and a block on their extension to firms from next April has been launched by a ContractorUK reader.

Nigel Scragg, an independent contractor for the last 10 years, says IR35 since its inception in 2000 has been “incorrectly used to investigate and prosecute” many business owners.

And at the time of writing, more than 12,000 people agree, having signed his online petition: ‘Repeal IR35 [reform] in the public sector and the proposed private sector rollout.’

'10,000, 100,000'

At such a level of support, the government must now issue a response (given that the petition exceeds 10,000 signatures), and will debate it in parliament if it exceeds 100,000 signatures.

But ominously, a Treasury minister’s fresh replies to MPs’ questions on IR35 reform indicates that the government does not have much new information to share on the issue.

“The government announced that the extension of the off-payroll working rules reform would not take effect until April 2020….to allow organisations more time to prepare,” Jesse Norman said on Tuesday.

“The reform will also not apply to the smallest 1.5 million organisations. The government have now consulted on the detailed design of the reform. Responses to that consultation will be taken into account when drafting the legislation.”

'Concerns'

Mr Norman was responding to Tory MP John Baron, who asked the minister at Treasury Questions ‘what steps are being taken to tackle concerns’ about the April 2020 rollout.

Pressing the minister, and likely not elated with Mr Norman’s IR35 policy developments refresher, Mr Baron asked: “What lessons are there from its application to the public sector?”

“That is a very important question,” begun Mr Norman, sounding aware that IR35 experts have urged HMT to look at and learn from the 2017 reforms, before adding to them in 2020.

“Independent research 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.

'Package of education'

Mr Norman also claimed: “The government recognise that the private sector is much more diverse, but HMRC will continue to work with stakeholders to improve employment status checks and associated guidance. It will also provide a significant package of education and support to businesses to help with implementation.”

The SNP’s Martyn Day then volunteered that “it is only correct that contractors pay their fair share of tax”, but the unsolicited Treasury-speak did not stop Mr Norman from extending the rhetoric.

'A whole lot worse'

“There is only about a 10% compliance rate with proper tax payable in this sector,” the minister begun.

“He [Mr Baron] should therefore be applauding, as I am, the means to raise the level of compliance. In many ways, this is a simplification of the rules, which is being carefully and deliberately handled.”

Mr Scragg is among the unconvinced. “I have seen the Cameron and May governments make this Blair-originated legislation a whole lot worse,” he said in a ContractorUK Forum post. “I intend to make a stand against legislation I detest as being extremely unfair.”