Today, ten contracting organisations signed a joint letter to the two Conservative leadership candidates, asking them to urgently reconsider two damaging pieces of legislation – IR35 (off-payroll) and the Loan Charge.
War on Contracting
In the letter to both candidates, the Treasury is accused of waging a ‘war on contracting‘, thanks to two damaging policies: the ‘off-payroll’ tax (an extension to the IR35 rules), and the Loan Charge.
IR35 was implemented in 2000 by the Labour Government at the time. Despite the damage the rules have done to the flexible workforce, the current Government have made things worse by adding an ‘off-payroll’ element to the existing rules.
The off-payroll changes, which have already been rolled out across the public sector, are set to hit the private sector in April 2020, unless rule makers can be persuaded to see sense.
The Loan Charge, which took effect from April 2019, is a tax on contractors who used payment vehicles with a loan-based element in the past. This draconian legislation has been widely condemned for its retrospective element – which means that individuals are being pursued for liabilities from schemes which were legal at the time they were used.
The All-Party Parliamentary Loan Charge Group (Loan Charge APPG) now has over 150 members – both MPs and Peers. Despite this significant opposition from within parliament, the Treasury still shows no sign of relenting.
So much for the ‘party of business’
James Leckie, who owns ITContracting.com, one of the signatories, said:
“When the Labour Government introduced IR35 two decades ago, it was deemed to be a very anti-enterprise measure. It is poorly thought-out, unfair, riddled with ambiguities, and has been a thorn in the side of the contracting industry ever since. It is hard to believe that the ‘party of business’ has not only left IR35 in place since 2010 but has decided to make it even more toxic, thanks to the off-payroll tax.
“If you could dream up legislation designed purposefully to alienate the huge army of professional contract workers in the UK, including many potential Conservative voters, this is it”.
Dave Chaplin, director of the Stop The Off-Payroll campaign, said:
“On behalf of hundreds of thousands of contractors and freelancers, we are calling for the next Prime Minister to stop this war on contracting and to instead sit down with the sector to discuss with us all how best to recognise and celebrate the UK’s flexible workforce”.
- Press release from contracting organisations (25th June) (Word Doc)
- Open letter to Boris Johnson (PDF)
The following organisations signed today’s letter to the candidates:
- The Stop The Off-Payroll Tax campaign
- The Loan Charge Action Group
- Freelancer & Contractor Services Association (FCSA)
- Contractor UK
- Freelance UK
- IT Contracting (this site)
- The Forum of Private Business
- WTT Consulting/WTT Big Group