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Reply from MP about IR35 Reforms

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    Reply from MP about IR35 Reforms

    Well, I emailed her three weeks before the budget and it's taken until now to garner a response... But here it is:

    Thank you for contacting me about the off-payroll working rules (often referred to as IR35).

    I completely understand that there are many legitimate reasons why some people choose to work through their own company. However, it is only fair that when two individuals are doing the same job in the same way, they pay broadly the same tax; that is what the off-payroll working rules are designed to achieve.

    Non-compliance costs the taxpayer billions of pounds every year, and it has been clear for some time that IR35 is not effective enough. To improve compliance, reforms were introduced in the public sector from April 2017. Individuals working through their own company in the public sector are no longer responsible for operating the off-payroll rules. Instead, the public sector body is responsible for determining whether or not the rules apply, and ensuring the necessary employment taxes are deducted.

    I understand that the Government is monitoring the impact of this change, and the initial evidence suggests that it has been successful in improving compliance. However, the cost of non-compliance in the private sector is still growing and will cost taxpayers £1.2 billion a year by 2022-23. Therefore, a possible next step would be to extend these reforms to the private sector.

    It is vital that any potential changes take account of the needs of the businesses and individuals who would be expected to implement them. That is why the Government has said it will carefully consult on reform in the private sector, drawing on the experience of the public sector reforms, including through external research it has already commissioned.

    Ministers have been very clear that this is not about imposing a new tax on the self-employed. IR35 only applies to those who work like employees and would have been employed were they not working through a company. Genuinely self-employed individuals continue to be unaffected.

    Thank you again for taking the time to contact me.

    With best wishes,

    - Wow. What a way to type a lot without saying anything. I'd love to know where the 1.2billion figure has come from...

    #2
    Who is the MP and what party?

    Comment


      #3
      Originally posted by mattfx View Post
      ...

      - Wow. What a way to type a lot without saying anything. I'd love to know where the 1.2billion figure has come from...

      The full estimated figure is 1.234567890billion.
      Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

      Comment


        #4
        Originally posted by mattfx View Post
        Ministers have been very clear that this is not about imposing a new tax on the self-employed. IR35 only applies to those who work like employees and would have been employed were they not working through a company. Genuinely self-employed individuals continue to be unaffected.
        So when are they closing down Accenture, Cr4pita and suchlike?

        HMRC have IR35 and should continue with it. Or else it is a new tax.

        Genuinely self-employed individuals will be caught up along with those who would have been employed.

        Wait! Did I say individuals? I meant individual! Me! Its everyone else who would have been employed......

        Comment


          #5
          Maria Miller, MP for Basingstoke - Tory party.

          Comment


            #6
            Originally posted by mattfx View Post
            Maria Miller, MP for Basingstoke - Tory party.
            Though I suspect HMRC wrote it for her.

            Comment


              #7
              I'll be honest I started crafting a pretty blunt response, but I do not wish to draw attention to myself and find HMRC doing a "spot inspection" for my IR35 status. I do not have the funds to defend that.

              Comment


                #8
                Originally posted by BrilloPad View Post
                Though I suspect HMRC wrote it for her.
                Almost certainly!

                Comment


                  #9
                  Originally posted by mattfx View Post
                  I'll be honest I started crafting a pretty blunt response, but I do not wish to draw attention to myself and find HMRC doing a "spot inspection" for my IR35 status. I do not have the funds to defend that.
                  Usually the next step is to see them in person. They tend to sound sympathetic. Then do nothing.

                  <sigh>

                  Comment


                    #10
                    I agree that they should be paying broadly the same amount of tax but it should be about cost to employ somebody - the employee costs the employer way more than the 100k often quoted in this argument - pensions and employers NI are on top of their salary, the contractor has to make these payments from within their 100k. The chances are that the employee will also be earning for 52 weeks of the year with a payoff if made redundant. The contractor can be got rid off at short, often zero notice. so there is a fair chance that the contractor won't hit the 100k.

                    If a contractor is on 100k, what would be the cost to employ a person with a salary of 100k?
                    Rule Number 1 - Assuming that you have a valid contract in place always try to get your poo onto your timesheet, provided that the timesheet is valid for your current contract and covers the period of time that you are billing for.

                    I preferred version 1!

                    Comment

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