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Treasury claims IR35 doesn't affect 'genuine' small firms
by Susie Hughes at 09:31 02/03/18 (News on IR35)
The Government has reinforced its message that the 'contractor-tax', IR35, doesn't affect small business owners who are 'genuinely self-employed.
Seasoned IR35 watchers will have a sense of deja-vu with the language used to answer a Parliamentary question about the effect IR35 reform has had on UK small businesses.

On behalf of the Treasury, Financial Secretary, Mel Stride, replied:
"The off-payroll working rules (sometimes know as IR35), do not affect small business owners who are genuinely self-employed.

"Individuals are only affected by the rules if they would be employees if engaged directly. The rules were reformed in April 2017 for public sector engagements to address widespread non-compliance. The reform only affects public sector bodies and the agencies or other third parties, who provide labour for the public sector.

"The Government is evaluating the impact of the public sector reform, including through externally commissioned independent research, which is due to be published this year."

Lack of understanding
Tax specialists Qdos Contractor, saw this as another indication that the Government simply do not understand the true impact of IR35 on the UK's two million independent workers.

Qdos Contractor CEO, Seb Maley, said: "This is yet another example of the Government's and Mr Stride's total lack of understanding on the impact IR35 reform has had, and continues to have, on genuinely self-employed contractors.

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"In theory, IR35 shouldn't affect the genuinely self-employed, but in reality, it's a different story altogether.

"Following public sector reform last year, a number of organisations, including The NHS, made blanket decisions placing their entire contractor workforce inside IR35 to protect their liability.

"This, along with many inaccurate IR35 decisions, placed many genuinely self-employed contractors inside IR35, resulting in the workers paying similar taxes to employees, but without any of the benefits.

"The Treasury's attitude towards IR35 is short-sighted - a real concern given private sector reform increasingly looks on the cards."


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Susie Hughes Shout99 2018


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