IR35 review request before April 2020 made

A request has been made to Chancellor of Exchequer Sajid Javid, urging for an “immediate review” into private sector IR35 implementation before April 2020 when the new rules come into play.

Two conservative MPs have written to Chancellor of Exchequer Sajid Javid, the MP for Wokingham John Redwood who has said that many of his constituents had expressed concerns before and during the recent election about the implementation of changes to IR35 that are due to come into effect on the 6 April 2020, and the Scottish Conservative and Unionist Party politician Andrew Bowie, MP for West Aberdeenshire and Kincardine, who has used his letter to remind Javid of a pledge he made on BBC Radio 4’s money box to have a review into proposed tax rule changes for the self-employed, which Javid himself said should also include IR35.

Any review would need to commence immediately before the new off-payroll working rules come into effect and potentially become a dampener on enterprise across the nation and undermine the self-employed. The self-employed are crucial to our prosperity and we should to do all we can to support them.”

The MP also warned that there is a distinct danger that many contractors could take their skills overseas for better reward, either through relocation or remote working and the use of technology.

The danger of the IR35 rules is the blanket ban or implementation by large companies in particular in the use of contractors. Barclays and GlaxoSmithKline have reportedly imposed a blanket ban of off-payroll workers.

The rules mean that private businesses are responsible for setting the tax status of any contractor they use, as opposed to it being the responsibility of the individual.

The fear is across the private contracting community that many companies and organisation will take the same blanket approach as has been seen in the public sector to determining the employment status of all contractors that they use, completely removing the administrative headache of determining the contractors status ownership on the company themselves.

It is a worry for the UK industry and its ability to attract the highly skilled workers they need. We should not forget that many of these highly skilled contractors are the very same people that helped the country recover very quickly from the 2008 global financial crisis.

Both MPs have urged Javid to either extend or suspend the 6 April 2020 deadline until a proper review of IR35 has been undertaken by the government.