• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

IR35 - Write to your MP

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    IR35 - Write to your MP

    Hi - new to the site but I've just written to my MP about the IR35 changes that come into effect in April 2020. Must be worth everyone trying? Feel free to copy my email below. My MP wrote back to say they would investigate with HM Treasury.

    Dear Mr Andrew

    I along with many other IT contractors are getting very worried about the pending implementation of IR35 into the private sector in April 2020. This is following what can only be described as a farce when it was implemented within the public sector with HMRC itself being completely inconsistent with its implementation of the new rules and having to back track some decisions after contractors quit, leaving them unable to complete projects.

    From a personal perspective, if the contract I work on next is deemed inside IR35, then effectively it will mean I will be forced to stop contracting and take a permanent role again, something I would rather not do. This is because under IR35 the government want to tax me as a permanent employee, and then as an employer and then finally as a corporation. I’ll be paying personal tax, personal NI, employers NI and corporation tax. All for no benefit! As a contractor I’m not entitled to holiday pay, sick pay, pension contributions or protected employment rights yet from a tax perspective the government think I’m permanent - this would be illegal if I were permanent.

    From a corporate perspective this doesn’t make sense either. Contractors are very useful, as they can be hired and fired at very short notice, usually to fill short term or project related roles. Most companies, in the absence of contractors, will look to fill these vacancies through large consultancies and will pay a significantly higher price for those roles and that freedom. This in turn will see this increase in cost pushed on to the end consumer.

    From a government and tax revenue perspective this doesn’t make sense either, as most (if not all) contractors that go permanent will be paying less tax as permanent employees than they would as contractors (personal tax and corporation tax and VAT). The simple reason being that the salary of permanent employees is significantly lower than the cost of contractors specifically to take into account holiday pay, benefits and the costs of employment.

    Finally there is the fact that most of the big IT consultancies are actually foreign owned and somehow do a marvellous job of reducing their UK tax bills and ensuring more profits go to foreign shareholders.

    So, in summary, as one of your constituents and a group of over 100,000 IT contractors, I’m very concerned about the impending changes from a personal perspective and about the decimation this is going to cause in the IT industry in the UK.

    The changes to the rules seem to have simply looked at an individual and the additional tax that could be raised (if everything stayed the same) and not at the bigger picture and the unintended consequences of the changes.

    I look forward to your reply.

    #2
    I emailed sajid javid directly

    Comment


      #3
      Originally posted by headsy View Post
      I emailed sajid javid directly
      Pointless, I'm afraid he is only required to respond to his constituents or to an MP on behalf of one of their constituents.

      As for the OP, i could probably write the answer you will receive from HMT via your MP. It will talk about fairness and completely ignore your original.
      Blog? What blog...?

      Comment


        #4
        I'm sorry but this is as bad as those awful petitions than individuals release and want us to sign.

        Hi - new to the site but I've just written to my MP about the IR35 changes that come into effect in April 2020. Must be worth everyone trying?
        It is but only if it's a clear, concise and correct letter that states the facts to be debated, not one petition to date has come close. Could have also been done a bit earlier in the process. We've already been through a consultation.. but anyway..Some points in yours are....

        From a personal perspective, if the contract I work on next is deemed inside IR35, then effectively it will mean I will be forced to stop contracting and take a permanent role again,
        But it doesn't. Didn't happen in the PS.

        This is because under IR35 the government want to tax me as a permanent employee, and then as an employer and then finally as a corporation. I’ll be paying personal tax, personal NI, employers NI and corporation tax.
        Erm.. are you really sure about this?

        All for no benefit! As a contractor I’m not entitled to holiday pay, sick pay, pension contributions or protected employment rights yet from a tax perspective the government think I’m permanent - this would be illegal if I were permanent.
        Went OK up to the illegal guff and fell apart at that point.
        From a corporate perspective this doesn’t make sense either. Contractors are very useful, as they can be hired and fired at very short notice, usually to fill short term or project related roles.
        Very useful? Really, is that the best argument you've got? And usually to fill short term or projects. It should be ONLY for that. That's the whole point of IR35 which has been around 20 years.
        Most companies, in the absence of contractors, will look to fill these vacancies through large consultancies and will pay a significantly higher price for those roles and that freedom. This in turn will see this increase in cost pushed on to the end consumer.
        Not really and they are not trying to get rid of them so not really a valid point.
        From a government and tax revenue perspective this doesn’t make sense either, as most (if not all) contractors that go permanent will be paying less tax as permanent employees than they would as contractors (personal tax and corporation tax and VAT). The simple reason being that the salary of permanent employees is significantly lower than the cost of contractors specifically to take into account holiday pay, benefits and the costs of employment.
        Possibly true but missing the point. The contractor will still not be being taxed in a way they think fair so you've completely missed that point.
        Finally there is the fact that most of the big IT consultancies are actually foreign owned and somehow do a marvellous job of reducing their UK tax bills and ensuring more profits go to foreign shareholders.
        Could have been a decent argument but not worded like this.
        So, in summary, as one of your constituents and a group of over 100,000 IT contractors, I’m very concerned about the impending changes from a personal perspective and about the decimation this is going to cause in the IT industry in the UK.
        There were 120,549 in IT/Telecoms sector in 2013 so must be significantly higher now This affects more than just IT. I've seen numbers up to 500,000 people will be affected. Better to encompass everyone to attack it that just the IT crowd surely?
        .

        Just doesn't cut the mustard for me and if I can pull it apart in 10 mins then how seriously do you think your MP will take it?

        Then there is the question of timing of this... bit late innit.

        Not for me this one.
        Last edited by Contractor UK; 14 December 2019, 20:43.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          and did you ask your accountant to countersign it?

          Comment


            #6
            Well intended, but I'm afraid this ship has sailed.

            MP wrote back to say they would investigate with HM Treasury.
            Translation: Your email been filed in the trashcan.

            You'll be fortunate to get another response without chasing and it will contain no more than platitudes.

            Comment


              #7
              Originally posted by Paralytic View Post
              Well intended, but I'm afraid this ship has sailed.



              Translation: Your email been filed in the trashcan.

              You'll be fortunate to get another response without chasing and it will contain no more than platitudes.
              agreed

              Comment


                #8
                I have to agree with the posters above that a single email to an MP at this stage in the game is largely pointless.

                If you believe that politicians can prevent IR35 working at presently advised, then join LCAG (which seems to have expanded into this space) and/or one of the other campaigns being organised by Dave Chaplin at Contractor Calculator or IPSE. (Although I confess I'm not sure that IPSE is running a campaign).

                If you believe that the politicians have no interest in making any significant changes to IR35, then consider carefully what you want to do.

                The easiest option is to accept the changes and the difference it will bring to your income and lifestyle.

                Next best is perhaps to enter a discussion with your end client (with or without the involvement of an agency) about sharing the burden of the additional cost by way of an increase in day rate.

                After that your options are limited.

                Either choose to believe that somebody can wave their magic tax planning wand and allow things to carry on as before, but with considerably more risk: choose to believe that you can arrive at a form of words in a contract that protects you (unlikely): choose to found and run a contractor organisation that campaigns against Gov't and end clients for a "better" result: accept the designation you are given and use perhaps an employment tribunal as an ally (be careful of what the end client may think).

                Unfortunately, all of the above requires coordinated action and a plan and an administration and support for a long battle. Experience tells us (me) that there is no appetite for this. You will get many people here saying there is, but just consider the percentage of posters here against the claimed 3m + contractors out there?

                Consider also the motives of those who have made a living from contractors over the last 20 years especially.
                • End clients, want a quality job at a price that suits them
                • Agencies want turnover of people and roles.
                • Intermediaries want contracts to churn regularly.
                • Agencies/intermediaries will have a convenient umbrella ready for those "inside" IR35
                • IR35 specialists will be engaged by end clients and intermediaries and will owe you nothing.


                Who's on your side?
                Best Forum Adviser & Forum Personality of the Year 2018.

                (No, me neither).

                Comment


                  #9
                  Originally posted by webberg View Post
                  I have to agree with the posters above that a single email to an MP at this stage in the game is largely pointless.

                  If you believe that politicians can prevent IR35 working at presently advised, then join LCAG (which seems to have expanded into this space) and/or one of the other campaigns being organised by Dave Chaplin at Contractor Calculator or IPSE. (Although I confess I'm not sure that IPSE is running a campaign).

                  If you believe that the politicians have no interest in making any significant changes to IR35, then consider carefully what you want to do.

                  The easiest option is to accept the changes and the difference it will bring to your income and lifestyle.

                  Next best is perhaps to enter a discussion with your end client (with or without the involvement of an agency) about sharing the burden of the additional cost by way of an increase in day rate.

                  After that your options are limited.

                  Either choose to believe that somebody can wave their magic tax planning wand and allow things to carry on as before, but with considerably more risk: choose to believe that you can arrive at a form of words in a contract that protects you (unlikely): choose to found and run a contractor organisation that campaigns against Gov't and end clients for a "better" result: accept the designation you are given and use perhaps an employment tribunal as an ally (be careful of what the end client may think).

                  Unfortunately, all of the above requires coordinated action and a plan and an administration and support for a long battle. Experience tells us (me) that there is no appetite for this. You will get many people here saying there is, but just consider the percentage of posters here against the claimed 3m + contractors out there?

                  Consider also the motives of those who have made a living from contractors over the last 20 years especially.
                  • End clients, want a quality job at a price that suits them
                  • Agencies want turnover of people and roles.
                  • Intermediaries want contracts to churn regularly.
                  • Agencies/intermediaries will have a convenient umbrella ready for those "inside" IR35
                  • IR35 specialists will be engaged by end clients and intermediaries and will owe you nothing.


                  Who's on your side?
                  I've said for many years that there are too many people/organisations/HMG with a vested interest in maintaining IR35 for it to be seriously challenged. Yes, Chaplin is having a go and as you imply, IPSE seems to have lost the plot. I'm unlikely to renew this year, so won't be up to date with their position. However, there appears to be some activity around supporting a case in the ET. I guess we'll know soon enough what transpires from that, if anything.

                  Comment


                    #10
                    IPSE is running a canpaign, but it is directed at Johnson and HMT and working from the inside on behalf of its membership and using independent research material, so it is not nearly as obvious as LCAG's or Chaplin's.

                    However I doubt any of them will actually prevail, IR35 is here to stay and HMG does not appear to be interested in any representations about how damaging its 2020 plans will be to the UK economy.
                    Blog? What blog...?

                    Comment

                    Working...
                    X