Boris Johnson and Rishi Sunak personally intervened to stop private sector IR35 reform amendments

Boris Johnson and Rishi Sunak personally stepped in to stop 'contractor-friendly' Finance Bill amendments on private sector IR35 reform from going ahead, ContractorUK can reveal.

The behind-the-scenes interventions by both the prime minister and the chancellor is cited by MPs in letters to constituents, who asked how off-payroll Amendment 20 failed when it was initially so widely supported.

It means that MPs who previously supported the amendment -- designed to delay the April 2021 reform, changed their votes, for fear of upsetting the two most powerful men in UK politics.  

“I was going to support the amendment,” Tory MP Crispin Blunt admits in a letter to a constituent. “[But] the PM personally intervened asking me to vote with the government.

“And given what he [Mr Johnson] said [to me],” added the Conservative MP for Reigate without detailing what was said, “I decided to respect his personal appeal for support.”

'The PM's favour is not something to be cast aside'

Astonishingly, Mr Blunt then confesses: “The prime minister’s favour is not something to be cast aside, and I can tell you in confidence that this will put me in a better position in future”. 

Online, underneath a copy of the letter and accusations that the MP served himself not constituents, a contractor said he received a similar account when he asked another Tory why he too changed his mind.

“I had the same from my MP, David Mundell. He had said several times that he would support the campaign against IR35, then voted against the amendment.

“His explanation was very similar -- that the vote would go that way anyway. Although in his case, it was Rishi Sunak that seemed to have persuaded him.”

'Good to speak earlier today'

In line with the claim from the contractor, David Kirkwood, a personal letter from the chancellor to Mr Mundell was sent on June 30th, just 24 hours days before the vote.

Obtained by ContractorUK, the letter from Mr Sunak tells the MP that it was “good to speak” to him “earlier today.”

The chancellor then says he will use the rest of letter to spell out “again” to Mr Mundell, why IR35 reform is “critical”.  

On the revelation that both No 10 and No 11 Downing Street stepped in on the off-payroll rules, to ask MPs to ditch their own opinions and wave the rules through, another contractor said:

“What [the MPs] are effectively saying here is ‘I agreed to vote for the amendment because I agreed it was right for my constituents, but then the PM [or Chancellor] said not to do it and he is more important than all of you.’”

'Forget the Lords'

The Self-Employed Alliance says Mr Johnson and Mr Sunak have, in effect, asked MPs to “forget” the scathing criticisms about IR35 from the Lords, who called for a delay.

“Backing a temporary prime minister above the advice from the House of Lords Economic Affairs Committee, industry, and electorate, seems stupid,” one contractor agreed on Twitter.

Another said, messaging Mr Blunt: “That’s great Crispin! Thanks for putting thousands out of work or…[on] zero working-rights contracts. What a pathetic MP with no backbone.”

'Assurances'

After the Commons vote on IR35 reform, which the government won by more than 60 votes, a lobby group said many Tories ended up backing the government upon “assurances” from the Treasury.

“Considerable discussions were had with many of the Conservative rebels,” said the group STOPT. “[HMT promised them that] the reforms would be smooth and not damage the flexible workforce.”

Recruitment software boss Dean Sadler, the founder of TribePad, is among those who aren't satisfied.

'Threats and stress'

“It’s time politicians created meaningful solutions to problems, not soundbites,” he says.

“Self-employed contractors bring a significant amount to the table, with their constant upskilling and agile approach to getting stuff done.

“But they are facing significant threats and stress due to the pandemic. IR35 [changing] will make their lives even worse -- something the government hasn't taken into consideration with refusing to scrap the change and go ahead with the reform in April 2021.”

'Tories are to blame'

Yesterday, Ryan Hollinsworth, a member of the Scottish Liberal Democrats, said that next year’s revisions to the off-payroll rules would “directly affect 15% of the UK’s workforce”.

“What is perhaps more concerning is the indirect effects on permanent employees when some businesses realise that they can hire contractors, expect them to behave like employees but provide no employment rights and pay them no national insurance.”

In an online post, Hollinsworth also said: “The Tories (‘the party of business’ but perhaps more ‘the party of big business’) are to blame for this. More work needs to be carried out by opposition parties, and the public need to be made aware of the impact these reforms will have on everyone.”

'Planning ahead, taking a measured approach'

In the contractor sector however, the priority now appears to be preparation not publicity.

“It’s now imperative that both contractors and organisations take the time to fully prepare for the reform and understand the risks associated by not managing things correctly,” says Chris Jones, director at IR35 service Colnort.

“In the run-up to the April 2020 deadline, there were many organisations that decided to adopt a highly controversial and risk-averse approach to the reform by banning PSC contractors.

“Now is the time for reconsideration and planning ahead, taking a measured approach that can be achieved through accurate determination tests and robust contractual compliance.

Leila Ghazzali of tax advisory WTT Consulting echoed: “It is becoming increasingly important to prepare for the reforms and to not leave any planning until last-minute. This applies to end clients, agencies and contractors.”

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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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