IR35 review and off-payroll tax roll-out to private sector

Summary

That this House notes with concern the previous Government’s plans to extend the off-payroll (IR35) changes to the private sector, despite the damage that this has done to the public sector including the NHS; further notes that the off-payroll tax means a 14.3 per cent extra cost on UK business made up of National Insurance and the Apprenticeship Levy; believes that this will damage the UK’s flexible workforce and the UK economy, driving up project costs and depriving businesses of access to key skills; notes that firms are already laying off self-employed contractors and that others are looking to offshore resource to avoid the extra costs; further notes that HMRC estimate that 153,000 UK contractors could lose up 25 per cent of their pay and that thousands of contractors will be asked to pay their clients employment tax bills, without getting the benefits of employment such as sick and holiday pay and a pension contribution; is concerned that the off-payroll tax will lead to tax non-compliance and the danger of people being lured into avoidance schemes, as happened with those now facing the loan charge; welcomes the commitment made by the Chancellor to hold an IR35 review made during the election, but believes this is will only be a genuine review if the roll-out is halted; and therefore calls for an immediate halt to the off-payroll tax roll-out and announcement of an independent review looking into how best to recognise contracting and freelancing in the tax system..

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Timeline

1. 19 December 2019

   Early Day Motion

   That this House notes with concern the previous Government’s plans to extend the off-payroll (IR35) changes to the private sector, despite the damage that this has done to the public sector including the NHS; further notes that the off-payroll tax means a 14.3 per cent extra cost on UK business made up of National Insurance and the Apprenticeship Levy; believes that this will damage the UK’s flexible workforce and the UK economy, driving up project costs and depriving businesses of access to key skills; notes that firms are already laying off self-employed contractors and that others are looking to offshore resource to avoid the extra costs; further notes that HMRC estimate that 153,000 UK contractors could lose up 25 per cent of their pay and that thousands of contractors will be asked to pay their clients employment tax bills, without getting the benefits of employment such as sick and holiday pay and a pension contribution; is concerned that the off-payroll tax will lead to tax non-compliance and the danger of people being lured into avoidance schemes, as happened with those now facing the loan charge; welcomes the commitment made by the Chancellor to hold an IR35 review made during the election, but believes this is will only be a genuine review if the roll-out is halted; and therefore calls for an immediate halt to the off-payroll tax roll-out and announcement of an independent review looking into how best to recognise contracting and freelancing in the tax system..

   Source: Early Day Motion

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Sponsors

• Tim Farron · Liberal Democrat · Primary sponsor

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