The first phase of the coalition government’s Spending Challenge, in which it invited individuals and businesses to come forward with ideas on how to make economies in the UK’s spending, has just morphed into phase two. The government has produced a shortlist of proposals following phase one. Now it’s asking the UK’s sole traders in particular – and yes, if you’re a contractor working through your own Ltd Company, that means you – to rate the ideas and voice their views on a range of issues. And one of those issues will be IR35, which features on the shortlist.
IR35 is currently under review by the Office of Tax Simplification, but this second phase of the Spending Challenge provides a real opportunity for those with first hand experience of the legislation to pinpoint its weak points and failings. The OTS and the government need information like this in order to proceed with a genuinely simpler and fairer alternative. The chief criticisms of the legislation as it stands are that is has unfairly regulated the flexible workforce and, as a consequence, damaged the UK’s competitiveness.
So, if you’ve got some views you’d like to share on the subject, pay a visit to the Spending Challenge website, type ‘IR35’ into the search box on the top right of the page, and rate the ideas you see on the results page. Enjoy!
It’s not any element of ‘unfairness’ that makes IR35 such a threat, it’s the element of uncertainty. HM Customs and Revenue took an area of employment law and turned it on its head. The tests by which a worker were judged *not* to be en employ were inverted to prove that a contractor must be an employee. This confusion was exacerbated by the hypothecation of a nonexistent financial relationship that obstinately ignored the contracts that existed between a worker and an agency and the second relationship between the agency and the customer. Finally the arbiter of this regulation made up on the spot would be HMRC themselves, with no recourse to more sensible heads for a properly considered opinion to apply. Star chamber treatment indeed.
The upshot of the sudden imposition of this change to the contracting landscape was that thousands of contractors and agencies did not know where they stood, and anxiously awaited the out come of test cases and appeals. Sadly these served to muddy the waters still further as the acepted definitions of tests for employment were modified, ignored and supplemented with additional conditions. Ten years on and none of us are any wiser or better informed.
Even the architects of IR35 are no better informed since HMRC do not seem to have done the post-implementation review to see if the benefits of additional revenue from the IT contracting sector have matched up to their predictions, or if the costs of pursuing this revenue have exceeded the revenue they claim to have obtained.
What a load of nonsense that “conversation” is. I was looking through and came across this illiterate contribution
http://spendingchallenge.hm-treasury.gov.uk/how-can-we-rethink-public-services-to-deliver-more-for-less/i-83435
that claims, if I understand the appalling English correctly, that all self-employed people are criminals (or Kerry Katona – couldn’t quite work that one out). If this is the level of idea that gets short-listed I hate to think what the rejected ones were like. The site just shows the dangers of treating everyone’s opinion, no matter how ill-informed, unresearched or just plain incomprehensible, as equal.