Sajid Javid IR35 Betrayal
UK contractors are furious after the Sajid Javid IR35 betrayal in his Autumn Statement. He had previously called for the Government to “repeal the Silly IR35 tax”. So contractors and freelancers eagerly looked forwards to his first Autumn Statement as Chancellor.
Would he repeal IR35 like he wanted to happen? Would he, at least, call a halt to the looming IR35 reforms in the private sector in April 2020? With an election looming would he do something about IR35 for all those freelancers operating in the UK? The answer was that he did nothing.
Contractors Questions on Sajid Javid IR35 Betrayal
- What were Sajid Javid’s previous views on IR35?
- Did Sajid Javid repeal IR35 in his Autumn Statement?
- What were Theresa May’s Views on IR35?
- So, why the Sajid Javid IR35 betrayal
What Were Sajid Javid’s Previous Views on IR35
In an article he wrote almost a decade ago, Sajid Javid said that the Government should “repeal the silly IR35 tax on providers of personal services”. That was just prior to him entering politics. At the time he was Managing Director of Deutsche Bank. So, he would know how useful a flexible workforce is.
After all the major banks use hundreds of freelancers. He would know that there would be times when you hire permanent staff and there would be times when you would hire contractors.
Did Sajid Javid Repeal IR35 in his Autumn Statement
Now, as Chancellor of he Exchequer he had the opportunity to do what he saw as right. He had the opportunity to either abolish IR35 or freeze the changes to it due in April 2020.
However he did not. Many contractors, who have become cynical about politicians predicted that he would not be true to his word – and they were right. Indeed he didn’t even mention IR35.
What Were Theresa May’s Views on IR35
Theresa Mays views on IR35 can be summed up by her following statement. ‘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’.
Chancellor Philip Hammond repeated this in his Budget statement. Freelancers know that this is not comparing like with like. Contractors don’t get any of the benefits that employees get and have less job security.
However, the Chancellor and Prime Minister determined to fix this ‘unfair anomaly’.
The big consultancies who have always seen contractors as rivals, have the ear of successive Governments. Contractors’ representatives have never managed to influence the Government much. So, very little pressure was put on he Chancellor to take action on it.
So, why the Sajid Javid IR35 Betrayal
Well, Prime Minister Boris Johnson has made a number of promises of more police, more help for the NHS etc. Although Sajid Javid thinks the IR35 tax is silly and previously said the Government should repeal it, the money it brings in is very useful for the Government.
The Chancellor will have to borrow much of the money that will be needed for Boris Johnson’s promises. Although he still probably thinks the IR35 tax is silly and should be repealed, he doesn’t think keeping it will lose him many votes.
Contractors and their representatives are not able to kick up a big enough stink about it. So, although he believes the IR35 tax to be silly, he’ll be happy to take the money it brings in.
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