Sajid Javid cheered as chancellor having backed small firms, tax reform and IR35 repeal

The appointment of Sajid Javid to chancellor of the exchequer by Boris Johnson has won a more unconditional welcome by UK contracting than the coronation of the PM himself.

Seeming to explain the stronger backing than his new boss received, Mr Javid committed only very recently to two policy approaches that the contractor sector has explicitly asked for.

Firstly, the former business secretary promised in a Financial Times article last month that he “will” – without equivocation – “broaden the Apprenticeship Levy into a wider skills levy”.

'Flexibility'

His vow to give “employers the flexibility they need to train their workforce” was welcomed yesterday by agency body the REC, and contractor group IPSE, which have called for the levy’s reform.  

But the group was last night more enthused about the second stance that the former Wall Street banker adopted in mid-May – freeing small businesses from the shackles of red tape.

Specifically, such tiny traders should get the government’s “full support” against ‘bureaucracy and paperwork,’ said Mr Javid, who has also worked in London growing Deutsche bank’s emerging markets business.

'He understands'

“We know Mr Javid understands the needs of freelancers,” reflected Chris Bryce, chief executive of the Association of Independent Professionals the Self-Employed (IPSE).

“He faces some tough challenges but an easy early win would be to boost the innovative microbusinesses that make Britain globally competitive.”

According to Mr Bryce, a former IT contractor, Mr Javid’s first priorities should be to scrap private sector IR35 reform, and suspend the now in-force 2019 Loan Charge.

'End the scandal'

At the time of writing, more than 200 of the Bromsgrove MPs’ colleagues agree with the latter suspension call, having signed a letter to the Treasury urging a review of the charge.

 “We congratulate Sajid Javid on being appointed chancellor” said the Loan Charge APPG. “[We] urge him to end the Loan Charge scandal, which has already cost lives and damaged the reputation of HM Treasury nationally and internationally.”

Should Mr Javid require some external insight about the charge (briefs authored by HMT/HMRC have been widely discredited), a leading barrister has offered his services.

'Contrary to the rule of law'

“Congrats to new HMT ministers [such as] Sajid Javid,” tweeted Keith Gordon QC. “I hope you will follow Jesse Norman’s example and allow me [to] explain in person why the Loan Charge is contrary to [the] rule of law and anti-conservative.”

But it’s not just Mr Javid, and his number two Rishi Sunak MP,  the newly appointed chief secretary to the Treasury, with whom hopes for a change of tack on the Loan Charge lie with.  

In fact, two of the APPG’s very own-- Esther McVey, has been appointed by Mr Johnson as Housing minister, and Grant Shapps as Transport minister. Both will attend cabinet.

'Continued support'

Lobbyists LCAG said it looked forward to “continued support” from both, and from Dominic Raab, another APPG member, who becomes foreign and commonwealth affairs secretary.

Similarly, APPG members Jo Johnson and Priti Patel have won Cabinet access, for being appointed business secretary and secretary of state for the home department, respectively.

All five parliamentarians have raised issues about HMRC’s treatment of taxpayers affected by the Loan Charge so a third appointment, albeit non-ministerial, might reassure them.

'Not fully independent'

“When I was at the OTS I remember asking why HMRC had no minister and there was some reason but I can’t remember why,” began Rebecca Seeley Harris, head of employment status at PKF-Francis Clark, writing on LinkedIn.

“Today, however, it has been announced that HMRC are to have a new Professional Standards Committee. The committee, which will take advice from a range of independent experts, will consider, among other things, issues relating to the implementation of HMRC powers. It's a pity the committee is not fully independent but, it goes some way to monitoring HMRC and maintaining public trust.”

But it’s trust in Mr Javid that will more individually now be put to the test. As well as committing to unshackling small traders and reforming the Apprenticeship Levy, he has also committed to doing away with IR35 – albeit nine years ago when he was not a politician.

'New broom'

Writing for Conservative Home, the then-investor in small businesses said: “We should… repeal the silly IR35 tax on providers of personal services.”

A status expert, who wants to see reform to IR35, was last night optimistic: “We have a new broom [in the shape of Mr Johnson] and hopefully a better broom cupboard in the form of the new chancellor Mr Javid. Fingers crossed.”

The Freelancer and Contractor Services Assocation also wants to see the government's IR35 proposals change. In an appeal to the new chancellor, the FCSA said: 

"[We] urge Mr Javid to take a look at the draft Off-Payroll legislation with fresh eyes. The complexity, unfairness and administrative burdens that the off-payroll proposals will bring to supply chains will be damaging to the UK economy, damaging to the flexible labour market, damaging to the recruitment sector and damaging to the workers it will impact."

'Punitive IR35'

FCSA's chief executive Julia Kermode also told ContractorUK: "It is absolutely critical that the UK remains an attractive place to do business, so pressing blindly ahead with the off-payroll reforms would be very irresponsible to say the least.  

"Next year -- 2020 -- is the wrong time for off-payroll reforms to be extended to the private sector, so let's hope the new chancellor can take a considered view and at the very least agree to delay and allow the economy to strengthen next year before it steamrollers ahead with these punitive reforms.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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