ContractorUK signs open letter urging Jeremy Hunt and Boris Johnson to stop ‘war on contracting’

Boris Johnson and Jeremy Hunt – one of whom will be the UK’s next prime minister -- are today urged by contractors to stop the “war on contracting” that their Tory Party has waged.

Ten contractor organisations including ContractorUK have written to the two Tory leadership hopefuls, urging them to suspend Loan Charge 2019 and halt IR35 reform from 2020.

Should the aspiring PMs refuse, the letter indicates that the Conservatives would no longer be able to count on contractors -- their “natural supporters”, when they next go to the country.

'Many reliant businesses'

Mr Johnson and Mr Hunt are also all but warned that they risk losing the support of the “many businesses who rely on” contractors for ‘specific projects at specific periods of time.’

Chiefly, this is because IR35 reform will hit firms with a 14.3% “stealth tax,” as well as a new employment classification on contractors of ‘employed but with no employment rights.’

“We are utterly baffled as to why a Conservative government, being a party that has historically championed entrepreneurs and businesses, would want to do this,” the letter adds to Mr Johnson, and Mr Hunt -- who ran his own business before entering politics.

'Absurd'

Published separately on ContractorUK today, the letter adds: “The idea that flexible workers will be classified in law as employees for tax purposes only, without any of the normal protections…is absurd, contrary to the Good Work Plan and is grossly unfair.”

Blame for the IR35 reform plan is not just put on the Tories, however. As well as pointing out that the “flawed” IR35 rules came in under Labour, HMRC receives short shrift too.

“[Reform of IR35 from 2020] is solely so HMRC can force them [contractors] into the PAYE system when it is clearly not appropriate nor fair,” the letter says, adding: “The main beneficiary being HMRC, who find this an easier system to administer and to collect taxes.” 

'Shocking'

Addressing the Loan Charge, which is the subject of an EDM bearing neither Mr Hunt’s nor Mr Johnson’s name (although it is signed by the latter’s brother Jo Johnson MP), the 10 contractor organisations say the Revenue is again at fault.

“[The] retrospective Loan Charge [is] a shocking changing of the law that barristers and MPs have described as overriding established statutory protections”, the letter states.

“[It is] undermining the rule of law in order for HMRC to have a second bite-of-the cherry simply because they failed to open tax enquiries over a decade ago – a fact that HMRC admit to.” 

'Stop this war on contracting'

The letter’s signatories, which include trade bodies like the FCSA and PRISM, but which extend to the Loan Charge Action Group, which supports contractors caught by the charge, and WTT Consulting, an advisory for contractors under HMRC enquiry, conclude:

“We, as organisations who either represent contractors and freelancers, or who operate in this sector, are urging you, as the person who will become the new First Lord of the Treasury, to stop this war on contracting.

“We urge you to pause, to listen and to change course and suspend and review the Loan Charge and halt the roll-out of the Off-Payroll Tax to the private sector and instead ask the Treasury to sit down and work with the contracting and freelancing sector to look at how best to recognise contracting and freelancing in our economy, to the benefit of all.”