Contractors urged to unify behind IR35 push to postpone 2021’s reforms

Calls to contractors back in May to press their MP to suspend the IR35 reforms of 2017 do not apply now, in June, when the focus should be on the halting IR35 reforms of 2021.

Issuing this alert, a lobbyist was referring to MPs meeting this Thursday and in the next few weeks, for the committee stage of the Finance Bill which contains the 2021 reforms.

‘Don’t confuse MPs’

“Campaigners,” began the lobbyist, Stop The Off-Payroll Tax in an “important” tweet.

“Please don’t confuse MPs by asking them to table amendments to get public sector IR35 off-payroll rules suspended. They’re not in the Finance Bill.”

The subtext is that although the MPs can still table amendments, including at the bill’s next ‘consideration’ stage, a suspension of the 2017 reforms is not their focus and is not in the bill.

Moreover, the public sector reforms lack political momentum, as only the 2021 reforms were subject to a government-ordered delay due to covid-19 and a highly critical inquiry by peers.

‘Unique opportunity’

On social media, campaigners who wish to inform MPs of the adverse impact of the 2017 framework are being encouraged to do so, but only as a reason to stop its April 2021 variant.

The UK’s largest chartered accountancy body, the ICAEW, made this specific point in 2019 – that only by fixing issues in the public sector’s off-payroll rules can an extension be made.

Updating its stance this month, the accounting body said the government’s 12-month delay due to the pandemic now affords it a “unique opportunity” to resolve a “number of matters”

‘Act upon the evidence’

The most fundamental four are; PSCs being made to pay Employer NI; aligning employment and social security rights; statutory payments for the IR35-caught and HMRC strategy.

“Don’t enact IR35 [reform] in the Finance Bill,” says the Institute of Chartered Accountants in England and Wales (ICAEW), referring to the 2021 reforms.

The institute’s tax faculty explained: “Given that many private sector organisations have already incurred significant costs and implemented systems changes…the government has a unique opportunity to consider whether the rules currently being legislated will work as intended, and to act upon the evidence of those businesses.”