MPs encircle chancellor over IR35 reform review date

Impatience over when the chancellor is going to find the time to review the changes to IR35 from this April – as he has promised -- has spread from the contractor industry to MPs.

Sir John Redwood MP was first to broach the question of the review’s timing in a letter he wrote to Sajid Javid before the Christmas break, by urging that it should start “immediately.”

Three more MPs have since tabled formal questions to Mr Javid, asking of the review’s start and end date; “what steps” he and the review will take, and what a future IR35 will look like.

'First priority'

Tomorrow, answers from HM Treasury are due to be provided to the three; Labour MP Jessica Morden and the Tory MPs Gordon Henderson and Dr Matthew Offord.

The timing of the chancellor’s reply -- amid the calls for the review to be run immediately (IPSE says it must be the "first priority" of the New Year) -- raises the prospect that Mr Javid may move straight to the review, and announce its launch.

But before the Christmas break, one independent reviewer of divisive tax legislation told parliament that it should pass the draft IR35 rules into law because the rules are justified.

'First importance'

Sir Amyas Morse, writing in his 2019 Loan Charge Review, said the draft off-payroll framework was “of the first importance,” and ‘needs and deserves’ the “support” from MPs.

The Treasury’s willingness to adopt almost all of Sir Amyas ’recommendations on the Loan Charge may make some contractors jittery that his IR35 reform rubberstamp might get drawn upon too.

But this Friday, the IR35 Forum will likely hear industry members including contractor accountants relay to HMRC their concerns about the reforms biting in a little over 12 weeks' time.

'IR35 Forum needs to be more independent'

The long list of engagers banning PSC contractors outright might be cited to debunk HMRC’s claim that the genuinely self-employed will not be affected. Others say the list proves the exchequer is going to raise even more revenue than the official forecasts indicate.

Last month, the Labour party recommended that the IR35 Forum should continue but only with a new independent chair at its helm, because the forum “needs to be more independent of HMRC” and “should be acting in more a scrutiny than a consultation role.”