ContractorUK writes to Boris Johnson and Sajid Javid over IR35 and Loan Charge 2019

ContractorUK has this morning written to Boris Johnson and Sajid Javid to hold them to account to commitments each made before becoming the UK’s prime minister and chancellor, respectively, about Loan Charge 2019 and IR35.

Backed by ten other outfits from the contractor industry, this website tells Mr Johnson that his pledge in June that the seemingly “superficial unjust” Loan Charge “needs a proper independent review” should now be actioned.

ContractorUK and fellow signatories including the FCSA, WTT Consulting and LCAG also tell Mr Javid that his pledge in 2009 that the Conservatives would “repeal the silly IR35 tax” should, likewise, be actioned.

'Out of control HMRC'

Bearing the signatures of the FPB, PRISM and FreelanceUK.com, the ContractorUK letter makes a third and final appeal – that No.10 or No.11 Downing St. launches an investigation into HMRC.

The call for the investigation, which is backed by others in the contractor sector like Contractor Calculator and Professional Passport, follows the Economic Affairs Committee in the House of Lords describing the UK tax authority as “out of control.”

“As organisations who either represent contractors and freelancers, or who operate in this sector, [we] are urging you both, as the new First Lord of the Treasury and the new Chancellor of the Exchequer to stop your predecessors’ war on contracting. 

'Stick to your clear commitments'

The letter then tells both Mr Johnson and Mr Javid: “To do this, we urge you to stick to your clear commitments made and restore the trust of contractors.

"[So] change course and announce, as a matter of urgency, that you will suspend the Loan Charge…[and] announce that the government will remove the roll-out of the Off-Payroll Tax from the draft Finance Bill”.

To leave the PM and chancellor in no doubt about their predecessors’ legacy, the letter asserts that policies introduced by the Treasury since 2015 “have not supported the sector, but have instead actively undermined it.”

'Unbelievable'

Signatory Anthony Sherick, ContractorUK’s director agrees: “Contracting allows workers to gain skills across many environments and transfer these skills within the private and public sector. This should not be undermined at all -- yet unbelievably measures introduced by the previous chancellor will do just that, particularly the IR35 reforms.”

Mr Sherick also said: “I hope the new Conservative leadership understands the requirement for a flexible and skilled workforce to help fuel the opportunities for economic growth. The new optimistic prime minister wants to focus on positivity and growing the UK economy and the benefits which the flexible workforce offers the UK is fundamental to this.”

Moreover, it is fundamental at a uniquely seminal time for the country, according to Julia Kermode, the chief executive of the Freelancer & Contractor Services Association (FCSA).

'Simple decision'

“With Brexit coming, potentially without a deal….it is critical that the UK remains an attractive place to do business”.

Addressing Mr Johnson and Mr Javid directly, she added: “You can achieve this by making the simple decision to halt the Off-Payroll Tax reforms.”

If concern for their own political and economic legacy fails to motivate Mr Johnson or Mr Javid to take action, letter signatory Steve Packham hopes that saving people’s lives will.

“With a change of the leadership of the government, we must now see a change of heart and urgent action to demonstrate this. Philip Hammond’s war on contracting has not only damaged business, but it has ruined lives,” the LCAG co-founder said.

'Not even your own policy'

Also signed by Stop The Off Payroll Tax and IT Contracting, the letter to Mr Hammond’s successor, and his new boss, states: “There have been five suicides of people facing the Loan Charge confirmed to the All-Party Parliamentary Group.

“And many thousands of ordinary families are facing ruin. Surely you do not want to be responsible for this, when it is not even a policy that you yourselves introduced?”

Rhys Thomas, managing director of WTT Consulting, says the Loan Charge policy is one which from the outset, its tax and legal advisers have determined to be “erroneous in law.”

'Equitable alternative'

“[So it’s] mercilessly unfair to the contracting community and their families”, said Mr Thomas, adding:

“We strongly believe that the loan charge should be suspended immediately. Not only do we join this call for the new prime minister Boris Johnson and Sajid Javid, the new chancellor, to stand by their words and review the loan charge [and revoke IR35 reform], but to listen to us and work with us to find a fair and equitable alternative.”