IR35 Petition for Contractors
Contractors have started an IR35 Petition.
Recently the Government announced that they were going to change the IR35 rules for those who contract in the public sector.
Previously, contractors decided their own IR35 status, for good or bad.
If they think that they are outside IR35 they would operate through a personal service company.
If they think they are inside IR35 they usually operate through a PAYE umbrella company.
HMRC Lose IR35 Cases
When HMRC disagreed with their judgement they investigated the PSC contractors.
However, HMRC had an overwhelming loss record.
Despite HMRC’s access to top legal advice, teir actions didn’t show them as getting it right. Contractors were far more likely to get it right than HMRC.
Public Sector IR35 Status
Now, from April 2017, contractors won’t decide their IR35 status in the public sector.
Government departments will now decide that.
Some have decided just to ban all contractors using personal service companies.
However, some contractors have put together a petition to get these public sector changes debated in Parliament.
The petition states as follows:-
Scrap IR35 legislation reform proposals for public sector off-payroll workers.
The proposal is to make ‘engagers’ deduct PAYE tax & NIC at source for self-employed people operating via a Limited Company if the end client is in the public sector.
This will severely reduce the income of such individuals but confer none of the rights & benefits of a staff employee.
IR35 Petition Debated in Parliament
Once they get to 100,000 signatures, they will have to debate it in Parliament.
Currently it has 24,578 signatures. So, it still is only 25% of the way there.
If it gets the necessary 100,000 signatures this will embarass the Government as it will hold a light up to what they are doing. There will be a lot of publicity about it.
Reforming Off Payroll Working Rules
The Government say “Reforming the off-payroll working rules in the public sector will ensure that all public sector bodies, and those who work for them, pay the right amount of tax.”
This is nothing of the kind. It is bullying many contractors into paying IR35 tax when they are not legally caught by IR35.
Even if the motion doesn’t carry, it will set a marker that contractors will not take any further changes lying down.
This is very important as some people believe that this is just a Government pilot project.
They believe that once the Government has tested this in the public sector it will roll it out in the private sector too.
If the Government are able to get away with this without any bad publicity, they will be encouraged to roll it out for all contractors whether public or private sector.
So, this is Contractor’s Thermopylae.
Sign the IR35 Petition
You have the opportunity to get this debated in Parliament by putting clicking here IR35 – Sign the Petition to get Debate in Parliament.
Also, pass it on to as many contractors that you know or that you have connections to on Social Media.
We only have a quarter of the signatures needed so far. However, if this goes viral it could quickly boost the numbers of people signing the petition.
We need 75,000 more. Do what you can to help.
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