What the Tory victory means for IR35 and off-payroll working
7th Jan 2020
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Right, unless you've been hiding under a rock the past few weeks, and if truth be told I can’t blame you, you'll know that the Tories won the general election. If you’re self-employed, an SME or an independent contractor then you most likely voted for the Tories and are chuffed with the result and what it means for you personally. Because BoJo himself made a pledge to you during the campaign to review IR35 and off-payroll working rules following a disastrous review process that began this year - and we all know that BoJo keeps his promises...right?
Anyway, it wasn’t just BoJo, it was the whole lot of them. Domic Raab was tweeting about it and Sajid Javid, the current Chancellor, promised that the anticipated private sector IR35 changes would be reviewed if the Tories held onto power and said that he wanted to be sure the reforms were “appropriate” before being rolled out.
But why was this such a hot topic on the campaign trail? Admittedly the Tories didn’t initially lead with this, instead, they copied LibDems and Labour (who both addressed it in their manifestos) and quickly saw how important a topic it was and jumped on the bandwagon. Not that I’m complaining - the reason why it was such a hot topic is because the new IR35/off-payroll rules that were introduced have been an outright disaster.
The off-payroll rules essentially were introduced to make sure that everyone paid their fair share of tax and weren’t trying to pull the wool over HMRC’s eyes by claiming they were self-employed or an independent contractor. The new rules meant everyone would be subject to the same employmentee status and therefore taxual obligations and if not, they would be fined. While they were designed with the right intentions at heart, they quickly became a monster that was out of control as they lacked the ability to differentiate between genuine contractors and tarred everyone with the same “tax-dodger” brush.
If all goes to plan and the Tories keep their promise, then the new off-payroll rules will undergo a proper review before its rollout in April 2020 and the PM will “work with the contracting community and stakeholders on devising how best to recognise contracting and freelancing in the tax system” - (Dave Chaplin, CEO of Contract Calculator).
But is this all smoke and mirrors? Would politicians really lie to us just to secure a vote and then renege on their promise? Of course not! Even still, a lot of people are still worried that there is simply not enough time to conduct a proper review what with the budget being planned for February/March which some say is simply too late for the new off-payroll legislation to be properly implemented.
One thing’s for sure, if it is to be done it will be need to be done sharpish and IR35 needs to be reviewed as a matter of urgency. It’s lucky that there’s nothing big happening at the start of next year that could distract people like, oh I dunno, leaving the EU or something like that. Like most things these days, we just have to sit tight and hope for the best and hope that the assurances made are kept. If worst comes to worst at least we have bigger things to worry about so keep calm and carry on!