Treasury minister Jesse Norman told 'all is not fine' after quoting Qdos on IR35 reform

A Treasury minister has made the surprising move of quoting a long-standing critic of private sector IR35 reform to the House of Commons.

But Jesse Norman did not mention Qdos, the respected status advisory and IR35 contract review firm, to tell his MP colleagues about the negative impacts of the off-payroll rules.

Instead, Mr Norman selectively quoted an extract from an online post which the firm made on the day the rules hit, as it tried to console contractors after attempts to stop the rules failed.

'IR35 reform being widely welcomed; let me give you an example...'

Not that the financial secretary to the Treasury offered the context.

He told MPs: “Changes to IR35 that the government have made have in some quarters been widely welcomed.

“Let me give an example… from the off-payroll advisory firm Qdos which said: ‘In recent months, the tide has turned, without thousands of businesses now aware of the fact that IR35 reform is manageable’.”

Seb Maley, Qdos’ chief executive, did indeed say the words which the minister attributed to him in a LinkedIn post on April 6th 2021.

'Short-sighted, totally needless rules'

But Mr Maley also said – in the same post – that the off-payroll rules are “short-sighted and totally needless.”

And also in the same post, that the new IR35 framework “marks the culmination of years of the government chipping away at contractors.”

Indicating that Mr Norman knows Mr Maley’s overriding view, the minister gave MPs the caveat that a company merely saying reform can be managed “may not be the widest possible welcome.”

Having heard the minister quote him on Monday, Qdos’ boss now says that he ‘stands by’ his comments, because “many” firms are “approaching” reform in a “fair and compliant” way.

'Norman speaking as though all is fine'

But it might come as news to Meg Hillier MP, chair of the Public Accounts Committee, who objected to Mr Norman equating ‘reform can be managed’ to it being ‘widely welcomed.’

“I have to challenge the minister on IR35,” the Labour MP said. “He is speaking as though it is somehow all fine.

“It has decimated sections of the tech and IT industry in my constituency, where groups of people came together to deliver short contracts and were actually paying as much tax as the Exchequer was getting from them. I can provide figures if he would like to take this up further, but let us not pretend that it is all fine.”

'Perfectly fine'

Mr Norman replied that there was “no suggestion on my part that it is all fine,” adding:

“One cannot make meaningful change to a market that is not performing as one would like and expect everything to be perfectly fine within weeks of the implementation of the measure.

“The point that I am making is that there are important players in the industry that recognise that -- in the quote that I have given – ‘thousands of businesses’ are now aware… that ‘IR35 reform is manageable’, and so it is.”

Then the minister said what he has previously said to argue in favour of IR35 reform, rebuking Ms Hillier that it was important that ‘people working side by side pay the same tax,’ and pointing out to her that the tax revenue lost to disguised employment “is used to support the NHS…[and] public services.”

'Contractors are suffering'

Some contractors might hope that at his next House of Commons appearance, Mr Norman quotes Qdos’ operations director Nicole Slowey.

She said: “Firms are still finding their feet, and adopting new processes can take time to get [things] right. I’m not naive though, and I know there’s still plenty of work to be done. [And] judging by posts and comments…lots of limited company contractors are clearly suffering from the changes.”

'Handpicked'

Speaking this morning, Mr Maley told ContractorUK:  "Jesse Norman obviously handpicked my quote to support his and HMRC’s view that IR35 reform was the right thing to do.

"Although he did make it clear that it wasn’t ‘the widest possible welcome, I certainly don’t think IR35 reform was necessary."

The Qdos CEO added: "It’s important that other businesses – those upholding needless contractor bans – are made fully aware that reform is not an excuse to stop engaging independent workers.”