Dominic Cummings, Contractors IR35 Saviour
Could contractors IR35 saviour be none other than Boris Johnson’s top advisor, Dominic Cummings? Are contractors missing a trick here by lobbying the Government instead of someone who is more powerful, and has more influence, than any Government Minister bar the Prime Minister, Boris Johnson.
Like many of us, Dominic Cummings is freelance. Just as with contractors he operates via a limited company called Dynamic Maps. Like many freelancers the main business of his company is stated as Information Technology Consultancy activities.
Questions on Contractors IR35 Saviour Dominic Cummings
- What Employment Status Does Dominic Cummings have – Inside IR35 or Outside IR35?
- What Powers Does Dominic Cummings have that could help him be contractors IR35 saviour?
- Why is Sajid Javid’s sacking good for contractors?
- Why are Boris Johnson’s and Dominic Cummings policies good for contractors?
- What are the Keynesian Policies Johnson and Cummings are following?
- What will be the benefits of the Government’s spending policies?
- Why did Sajid Javid need to go?
- Why is Sajid Javid’s dismissal good for contractors?
- Would Cumming be contractors IR35 saviour against the Treasury and HMRC?
- How did Treasury Minister Jesse Norman make a fool of himself?
- What would Dominic Cummings make of Jesse Norman?
- How should contractors make use of an IT consultant in No. 10?
- Is Cummings a freelancer by attitude?
What Employment Status Does Dominic Cummings have – Inside IR35 or Outside IR35
Presumably, whoever is hiring him for his IT consultancy will have to declare his employment status. Maybe he’ll have to sit HMRC’s Check Employment Status for Tax IR35 test (CEST).
If he has to go through the whole rigmarole that contractors have to on IR35 he’ll see how ridiculous it is. He’ll see how ridiculous the questions are and he will see how ridiculous the CEST quiz is.
So, he is one of us. Indeed he strikes me as one of us. Freelancers are a different beast from permanent employees.
What Powers Does Dominic Cummings have that could help him be contractors IR35 saviour
Contractors are always saying that there are no IT contractors in Parliament and so the Government does not understand our concerns.
Well, here is someone right at the heart of Government who understands us very well, Indeed he is one of us.
So, how powerful is he?
Well, just recently he managed to get rid of supposedly the second most important person in the Government, i.e. Chancellor Sajid Javid. So, that puts him at more powerful than the supposed second most powerful person in the Government.
Why is Sajid Javid’s sacking good for contractors
And the demise of Sajid Javid may turn out to be good news for freelancers as far as the looming IR35 changes are concerned.
Because going with Sajid Javid is also his fiscal rules. Sajid Javid set out his fiscal rules which say that the books must balance on day-to-day spending by the half way point in this Parliament.
And this was the real reason why Dominic Cummings believed the ex-Chancellor had to go.
Why are Boris Johnson’s and Dominic Cummings policies good for contractors
Cummings and the Prime Minister won the election on the basis of Brexit and also of spend, spend, spend.
They are going to hire lots of doctors, teachers, nurses etc and spend money on the infrastructure of our country.
This is classic Keynesian economics cast aside by previous Conservative Prime Ministers and Chancellors since 2010.
Interest rates are historically cheap. This is the classic time for Government to borrow to spend on Infrastructure.
What are the lessons of history
During the Great Depression in the USA the economy fell by 50%. President Hoover was an austerity man just like our last few Prime Ministers and Chancellors.
He cut spending and when the economy still kept shrinking he cut more. And when the economy fell further he cut again.
Britain, advised by John Maynard Keynes did the opposite. They spent on infrastructure. Keynes advised the British Government to hire a load of men to dig a whole and hire a whole load of others to fill it in.
This was for effect obviously but you get the point.
What are the Keynesian Policies Johnson and Cummings are following
When King George said that he would cancel the build of a Royal yacht ‘in sympathy with my people’, Keynes said he should build two instead. This would put money into the pockets of Glaswegians who would spend it in local shops and businesses re-invigorating the economy in the city.
As a result of following Keynes’ advice the British economy fell just 5.9% in one year and started growing again the next. This lesson was forgotten by recent Governments – but not by Dominic Cummings.
What will be the benefits of the Government’s spending policies
Indeed Christine Lagarde at the EU calculated that to cut the deficit by one pound you had to cut three pounds out of the economy. That’s because those Government workers you cut like police, doctors and nurses are consumers too. If they can no longer spend so much that will hit the local economy. They may also cost the country unemployment benefit and social security.
So, following the Keynesian route it is like that for every pound that is added to the economy in terms of spending, This will give a three pound boost to the economy.
That is what Dominic Cumminge and Boris Johnson are setting out on. They want to boost the economy buy hiring heaps more doctors, nurses, teachers etc. According to Keynesian economics that should give the economy a massive boost.
Why did Sajid Javid need to go
However, there was someone with his fiscal rules who would stop that and it was Sajid Javid. You couldn’t balance day to day spending by the middle of this Parliament and borrow all that money and spend all that money.
So, he had to go and Dominic Cummings engineered that. There has now been a virtual takeover of No. 11 by No. 10. There will now be just one joint team of advisors – controlled by No. 10, i.e. Dominic Cummings who will sit at the head of a team of advisors running both No. 10 and No. 11.
Why is Sajid Javid’s dismissal good for contractors
So, why is this potentially good news for contractors?
Firstly, despite Sajid Javid saying when Managing Director at Deutsche Bank that the Government should ‘repeal the silly IR35 tax’, in Government, when he was in control, he did no such thing. Instead he left the Theresa May / Philip Hammond legislation in place. This is due to be implemented on April 6th 2020.
His fiscal rules to balance the books on day-to-day spending by mid-Parliament would have made it more difficult without the boost to the Treasury coffers by the income from the IR35 changes.
However, without those fiscal rules in place, there is less need for the money coming in from IR35. The Government could just borrow more at historically cheap rates.
That’s not to say that the Government will do this. They may still fancy the income. But it means that without the fiscal rules they could borrow that money if they wanted instead.
Would Cummings be contractors IR35 saviour against the Treasury and HMRC
The other potential bonus for contractors is Dominic Cummings attitude to the Civil Service and Civil Service departments. He doesn’t like the way they operate. He doesn’t like the way they have influence over Government. One would assume that this would mean the Treasury and HMRC too. And he means to do something about it.
How did Treasury Minister Jesse Norman make a fool of himself
We had the ridiculous situation last week of Treasury Minister, Jesse Norman, saying in Parliament that he wasn’t aware that blanket banning of contractors using personal services companies was taking place.
It’s happening at virtually all of the UK’s biggest companies and all of the UK’s major banks.
They say that there are three types of people in life:-
- Those that make things happen
- Those that things happen to
- Those that say “what happened?”
It’s clear which category this senior Government Treasury Minister is in.
What would Dominic Cummings make of Jesse Norman
One wonders what Dominic Cummings would make of this type of thing. He doesn’t strike me as someone who suffers fools gladly.
Furthermore, Jesse Norman appears to have gone native and espoused all the beliefs of HMRC. He was spouting off in Parliament when answering a question on IR35 that there is ‘only 10% compliance in this area’. It appears that he has fully subsumed himself into the culture of HMRC.
I don’t think that Dominic Cummings would like elected ministers being so totally subsumed into the culture. One feels he would want the Government Ministers to be making the plays and the civil services carrying them out.
How should contractors make use of an IT consultant in No. 10
But contractors appear to be missing a trick here. Wouldn’t it be better to try and get to see a fellow IT consultant who is operating in such a high position in No. 10 rather than dyed in the wool ministers like Jess Norman or Sajid Javid?
It would be best to try and get to see him. However, there are a number of advisors running no. 10 and 11 now. Indeed Jesse Norman will be finding that he has an advisor minder now.
It might be an idea to try to get to see one of Dominic Cummings team of advisors – and preferably one operating out of No. 11 now. One would hazard a guess that all of these advisors would be freelance and operating via limited companies.
Surely they would be sympathetic to us. They may even be in the same boat as other freelancers.
One would say that it would be a good idea to get the ear of someone who has the ear of fellow IT Consultant, Dominic Cummings.
Is Cummings a freelancer by attitude
Freelancers are freelancers by attitude. So many of the recent PMs and Chancellors you can see are permies by nature – like Theresa May. Most recent PMs and Chancellors have been Roundheads.
Boris Johnson and Dominic Cummings strike me as being freelancers by nature – Cavaliers.
It might be an idea for representatives of the contractor community to put out a few feelers to see if they can get an audience with one or more of these guys.
They may be able to see what a nonsense these changes are and the damage they can do. And they may also have the power to stop at least some of them.
By the way, according to the Daily Mail, Dominic Cummings earns £100,000 a year in his role as IT Consultant at No.10. So, he would be a fairly typical IT Contractor then.
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