James Poyser, CEO of inniAccounts and founder of offpayroll.org.uk, has written an open letter to Chancellor Rishi Sunak, and HMRC’s Jim Harra and Jesse Norman calling for a halt to the proposed IR35 reform in the Finance Bill, as umbrella employees become casualties of inconsistent practices.
Marked urgent in light of the planned House of Commons vote on 19th May 2020 on the Off-Payroll resolution, the letter highlights that CV19 has exposed that the taxation and treatment of the self-employed and independent professionals is broken, and IR35 is the cause, not the solution.
In the letter James draws attention to the greatest symptom of the flawed IR35 reforms namely the reluctance of umbrellas to pass on the support promised by the Chancellor. In effect, contractors once again face becoming an underclass of zero-rights employees.
In the last two weeks, offpayroll.org.uk has been inundated by evidence that numerous umbrellas are refusing to put contractors on the Job Retention Scheme. Justifications given to contractors include ‘the allocation of furlough has been exceeded’, paying ‘the apprenticeship levy to furloughed contractors, will result in us going bust’ and that there is doubt ‘whether or not they will be reimbursed by the government for accrued holiday pay or apprentice levy’. (See LinkedIn for more examples)
James says that contractors are caught in a web of red tape with nowhere to turn: “Like so many workers, self-employed people have faced enormous upheaval in the last few weeks. The Chancellor came good on a number of policies to help them but there is growing evidence that many contractors who were pushed into umbrella employment due to IR35 are now facing challenges accessing CV19 support, despite having paid full employment taxes.
“This contempt is leaving people effectively stuck between a rock and a hard place: ‘benched’ without income and unable to access any of the employee, self-employed or business emergency measures introduced by Rishi Sunak. Their only option is to access Universal Credit.”
James is calling on Rishi Sunak and colleagues at HMRC to retract April 2021’s IR35 reforms urgently and launch a proper review as recommended by the House of Lord’s Finance Bill Select Committee. James is also encouraging all MPs to use their moral compass and vote against the reforms if the bill goes ahead unchanged, stating:
The Finance Bill will accelerate the creation of “zero-rights employees” and CV19 bears witness to the immorality of this.
Should you support the Finance Bill amendments you will be complicit in allowing this injustice to be your legacy. Please, don’t lend your name to the morally bankrupt Finance Bill.
James explains what contractors can to do exert pressure: “People effected can now highlight the inconsistencies at www.offpayroll.org.uk/umbrella. Contributions will be used to grow the body of evidence to show that at the very least regulation of umbrellas is necessary to help protect contractors, if not then a better solution that protects the rights of those taxed as employees is needed.”
James is also urging self-employed people to write to their MP and ask them to vote against the bill, using his letter as reference.
James adds that the consequences of ploughing on could be dire for the government: “Research by offpayroll.org.uk in February showed that there was a stark inequality in employment rights as a result of ‘inside IR35’ determinations, prompting 85% of contractors to say they would join, or would consider joining, a class action case seeking these rights. This research was part of extensive evidence we submitted to, and was accepted by, the House of Lords Finance Bill Select Committee on the extension of IR35 rules. I fear, that if Rishi Sunak fails to act and do the right thing very soon, he could face action sooner than expected.”