IR35 Tax on Contractors
- What are Sajid Javid’s Views on the IR35 Tax on contractors and freelancers?
- What are the Chancellor’s views on Corporation Tax?
- How does the Chancellor view Business Rates for small businesses?
- What are Chancellor Javid’s Views on regulations affecting small businesses?
Sajid Javid’s Views on the IR35 Tax on Contractors
In an article that he wrote a decade ago Chancellor Sajid Javid gave his views on the IR35 tax on contractors. He said that the Government should repeal the silly IR35 tax on providers of personal services. Now this was around 10 years ago, before he was even a politician. Hopefully his views haven’t changed since then.
However, Prime Minister Boris Johnson has tasked him with finding the money for 21,000 extra policemen, extra spending on the NHS and on infrastructure projects.
So, if he abolished IR35, that would be even more money he has to find. But at least we know that the Chancellor thinks the IR35 tax is stupid. So that it will be easier for contractors representatives to talk to him.
This compares with the previous opening pair of May and Hammond who said that ‘it is an anomaly that a self employed person earning £100,000 a year pays less tax than an employee earning £100,000 a year’.
That was the reason they gave for pressing on with the IR35 reforms in the private sector from April 2020. That was even sillier than the IR35 tax on contractors.
The Chancellor’s Views on Corporation Tax
The Chancellor’s views on Corporation tax are quite simple. He wants to slash the rate of Corporation Tax in the UK to 12.5%. That would make it the same Corporation Tax as in Ireland. Leaving the EU would give the Chancellor a great opportunity to do this without hassle from them. They want Ireland to raise its Business Tax.
The 12.5% Business Tax has been a great boon to Ireland. All the top technology companies in the world are there. Indeed, Ireland, with only 1% of the EU’s population, has 25% of the US’s technology investment in the EU. That’s mainly down to the low business rates.
However, they use Ireland as a base to sell tariff free into the EU. Britain will not have that advantage. However, it will be something that is welcomed by UK contractors. If the Chancellor does cut Corporation Tax to 12.5% along with abolishing the silly IR35 tax on contractors, that would be something. Dare contractors hope?
How the Chancellor Views Business Rates on Small Businesses
He wants to give small businesses automatic relief from Business Rates. That’s another crowd pleaser for contractors and freelancers in the UK along with the repeal of the silly IR35 tax on contractors.
Chancellor Javid’s Views on Regulations affecting Small Businesses
Chancellor Javid wants to get rid of as many regulations affecting small businesses as he can. As someone who rose to prominence in business, in the banking sector, this is something close to his heart.
Government regulations build up over time. It needs someone to take a look at them every so often to see which ones are counterproductive. Perhaps he could start with the silly IR35 tax on contractors.
Conclusion on New Chancellor and the IR35 Tax on Contractors
Contractors tend to be a bit cynical when it comes to believing what politicians say, especially on IR35. All Prime Ministers and all Chancellors have been anti-contractor since 1999.
Can we dare hope that a Prime Minister who is a freelance journalist and a Chancellor who rose through the ranks to become Managing Director of Deutsche Bank, will be more freelancer friendly than the others?
Will the Chancellor really repeal the ‘silly IR35 tax on contractors?’
What do you think? Is there hope?
Sajid Javid IR35 Policy – Make It Fairer and Simpler for Contractors
How Companies Can Help Contractors Avoid IR35
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