Huge Contractor IR35 Win
Freelancers were celebrating a huge contractor IR35 win as the Government blinked first in the off payroll dispute.
The Government had already delayed their IR35 reforms from April 2019 to 2020 and now to April 2021. Contractors will be hoping that the Government have time to do a proper review of the IR35 tax instead of the recent cursory one.
Questions on Contractor IR35 win
- Why did the Government postpone the IR35 off payroll reforms?
- Is this Contractor IR35 win just temporary or could it be permanent?
- Is the Coronavirus Covid-10 a genuine reason for delaying the IR35 reforms?
- Did contractor solidarity contribute to the contractor IR35 win?
- Was it pressure from big business that contributed to the contractor IR35 win?
- What must contractors do now for a permanent contractor IR35 win?
Why did the Government postpone the IR35 off payroll reforms
The Government announced last night that the IR35 off payroll reforms would not now take place till April 2021.
According to Chief Secretary to the Treasury, Steve Barclay in the House of Commons, “This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.”
Well, contractors will take that. It gives them a better opportunity to win the argument and get the off payroll tax abolished altogether.
Is this Contractor IR35 win just temporary or could it be permanent
So, is the Government changing its mind?
According to Steve Barclay, “This is a deferral and not a cancellation, and the Government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.”
So, at least, according to the Government, this contractor IR35 win is only temporary. However, this is two years in a row that the Government have had cold feet and postponed the IR35 off payroll reforms.
Is the Coronavirus Covid-10 a genuine reason for delaying the IR35 reforms
I’m sure that the coronavirus, officially known as Covid-19 was a genuine reason for the delay. However, the campaign by contractors, and even more so, the refusal of contractors to be shoved into inside IR35 contracts when they would test outside IR35 is a major factor too.
The Government don’t have a huge track record of listening to contractors. However, they do listen to big companies. Those big companies must have been telling the Government about the impending catastrophe as tens of thousands of contractors told their client companies that they would not be accepting those inside IR35 contracts.
Did contractor solidarity contribute to the contractor IR35 win
This would mean perhaps a third of the contractors used by companies blanket banning contractors were about to leave.
Contractors basically do most of the coding work across the UK. Their departure in droves would have serious consequences on, for example, regulatory systems. there was a danger that they would not be finished in time. This must have been a factor in the Government’s decision.
Was it pressure from big business that contributed to the contractor IR35 win
That would have had a huge negative effect on their businesses. Maybe the Government listen to the big consultancies over contractors. But our biggest companies, when working in tandem, outrank the Government’s big consultancy advisors.
However, this huge contractor IR35 win is only a stay of execution for now. Contractors and their allies in big business must use this opportunity to get the IR35 off payroll reforms cancelled rather than postponed.
What must contractors do now for a permanent contractor IR35 win
Those contractors campaigning for the abolition of the IR35 reforms have done a great job. They have managed to enlist the House of Lords and some MPs to their side. Contractors must continue working with them.
However, they must also unite with the representatives of the big companies who have enormous clout and who never wanted this in the first place.
This is a welcome contractor IR35 win. However, contractors must now unite to win the war. It is now within he realms of possibilities that the IR35 off payroll reforms could be stopped altogether – or at least watered down.
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