After the recent House of Lords Economic Affairs Finance Bill Sub Committee hearing, its Chair, The Rt Hon. the Lord Forsyth of Drumlean, wrote to the Financial Secretary to the Treasury, the Rt Hon.Jesse Norman MP. The letter, which can be downloaded from the government website here is an extremely well crafted indictment of the legislation, its rationale and the impact it is having on an already very hard pressed sector of the economy.
Key issues raised by Lord Forsyth in his letter include: the cost of the reforms, evidence on the (non-benefits of) the existing public sector measures, blanket assessments by end user organisations, the role of umbrella companies, the Check Employment Status for Tax (CEST) tool, (lack of) ‘joined up government’ and the fairness of the proposed changes.
Lord Forsyth is at pains to draw out the inequitable and false logic of the Treasury’s historic position, that each worker should pay a fair and similar amount of tax based on an assessment of doing similar work alone. For many years, the government has been told that this logic is false and borne of a jaundiced and biased point of view. It does not stand up to scrutiny when looked at independently and the letter demonstrates this admirably.
At one point Lord forsyth asks:
“Do you agree that a contractor falling within scope of IR35 will be treated in the same way in the eyes of HMRC as an employee, but will not enjoy or be protected by the same rights as that employee?”
He concludes his questioning with a nod to the future, to demonstrate the sub committee’s clear findings that the regulations are damaging, by asking the Financial Secretary:
“What assessment has the Government made of whether the strategy of treating contractors
and freelancers as employees for tax purposes, but not for employment rights purposes, will
diminish innovation and flexibility in the UK workforce? How will any such diminution enable
the UK workforce to respond in the short term to the economic impact of COVID-19, and
in the longer term to the challenges of the Fourth Industrial Revolution?”
I recommend the letter to you. Please read it. If you wish to give time to the Institute’s continued efforts on this topic, please contact firstname.lastname@example.org and we will be delighted to have you on board.
In the meantime, please consider writing to your MP to let them know your views on the IR35 regulations and the benefits to the country of removing them from the statute book on a permanent basis.