IR35 Challenge to Contractors
Treasury Minister, Jesse Norman, threw down an almighty IR35 Challenge to contractors in answer to a question in Parliament. He backed the IR35 reforms and said that if contractors didn’t like taxation without benefits they could try to get it overturned at an employment tribunal.
Questions on IR35 Challenge to Contractors
- What IR35 question was asked in Parliament?
- How did Treasury Minister answer that IR35 question?
- Who would win a Jesse Norman IR35 Challenge to Contractors in the courts?
- Is Treasury Minister Jesse Norman Out of Touch?
- Will there be a court battle between HMRC and a major UK company over IR35?
What IR35 question was asked in Parliament
The IR35 question asked in Parliament was as follows:-
“To ask the Chancellor of Exchequer, what assessment he has made of the effect on employment rights of the proposed reforms to off-payroll working rules. ”
The Matthew Taylor Report which the Government commissioned backed the Government’s IR35 reforms but said that contractors should get the benefits of an employee.
The Government accepted the report – except for the bit about giving contractors inside IR35 benefits.
How did Treasury Minister answer that IR35 question
Jesse Norman’s reply was as follows:-
“It is fair that two people working as employees pay broadly the same tax and NICs, even if one of them works through their own company and the other is directly employed.
“There is no direct link between employment status for rights and employment status for tax; however, those who wish to challenge their employment status for rights can take their case to an employment tribunal, regardless of their tax status.”
Who would win a Jesse Norman IR35 Challenge to Contractors in the courts
So, the gauntlet has well and truly been thrown down by the Treasury Minister. He is inviting contractors to take on the Government and HMRC over the new IR35 rule changes.
A challenge by a contractor as regards their employment status for rights would be very interesting.
HMRC don’t have a great success rate at employment tribunals losing 80% of the cases – even though they can pick whatever contractors they like to investigate.
Is Treasury Minister Jesse Norman Out of Touch
Treasury Minister, Jesse Norman, appears to have gone native since he joined the department and spouts the HMRC line on any occasion.
He said, in response to an earlier Parliamentary question that he wasn’t aware that companies were blanket banning PSC contractors.
For goodness sake!
There is a HMRC minder in at all of our top 2,000 companies – and virtually all of those have decided to blanket ban PSC contractors.
Did none of the 2,000 mention this to him?
As I said it would be great to see a contractor take them for rights at an employment tribunal.
Will there be a court battle between HMRC and a major UK company over IR35
It would be even better to see a battle in the courts between the Government / HMRC and one of the big companies being affected by the IR35 changes.
It would be good if HMRC decided to fine one of the companies still allowing contractors to use personal services companies. Then we would see the mother of all battles in the courts.
They already fined the NHS £4.3m for misuse of the CEST tool.
But that was just moving money from one Government department to another. It was suspicious it happened at a time when private sector companies were making up their minds what to do.
The biggest misusers of the Check Employment Status for Tax test is HMRC itself. The test has no credibility.
So, will we see contractors taking up Treasury Minister Jesse Norman’s IR35 challenge to contractors?
We shall see!
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