Contracting organisations from across the sector have penned an open letter to prime ministerial candidates urging them to halt plans to introduce the deeply flawed Off-Payroll Tax to the private sector, and abolish the retrospective Loan Charge.
Warning of the irrevocable damage to the flexible workforce that both policies threaten, the letter demands the future leader to address the injustices that has gone ignored by current ministers.
“We are at a point now where MPs, more than ever, need to scrutinise HMRC’s behaviour,” says ContractorCalculator CEO Dave Chaplin. “The current policies being pushed through Parliament - often under the radar and without full impact assessments or even evidenced claims - are likely to seriously damage UK Plc and the flexible workforce at a time when we are going to need it the most.”
Download - Open Letter to Conservative Candidates
Open letter highlights numerous Tory failings
The letter is signed by ContractorCalculator and its campaign group Stop the Off-Payroll Tax, the Freelancer and Contractor Services Association (FCSA), ContractorUK, FreelanceUK, WTT Consulting, ITContracting.com, PRISM, The Forum of Private Businesses and the Loan Charge Action Group (LCAG). The issues raised include:
- Government’s willingness to approve policy with insufficient supporting evidence
- HMRC’s seemingly unchecked power
- The injustices created by the Off-Payroll Tax and subsequent impact
- Government’s refusal to consider employment rights for ‘deemed employees’
- The Loan Charge’s overriding of established statutory protections
- The ruinous impact on the UK economy and workforce flexibility.
“As the Economic Affairs Committee recently highlighted when calling for a review of HMRC’s powers, the taxman has too much power,” notes Chaplin. “This is evidenced by the Off-Payroll Tax and the Loan Charge, which prioritise tax yield over the concept of fairness. Whoever succeeds Theresa May needs to ensure that they succeed where she has failed in holding the taxman to account.”
Incoming prime minister can right Tory wrongs
Though the Conservative Government has historically championed entrepreneurs, the implementation of exploitative policies have ensured that it is no longer viewed as the pro-small-business party that it claims to be.
The party is reminded of its own hypocritical approach to IR35 in the letter, which refers to Tory opposition to IR35 ahead of its Labour-led April 2000 creation, along with promises to reform the legislation.
Instead, Government has since made matters worse by introducing what organisations refer to as ‘an effective 14.3% stealth tax on business’, and rules geared towards forcing contractors into false employment.
“The incoming Tory leader and his cabinet have an opportunity to right the wrongs of the current PM and Chancellor and show that they genuinely support entrepreneurship and small businesses,” concludes Chaplin. “Whether they choose to do so is another matter.
“One thing that’s for certain is it would be incredibly naïve for the incoming PM to assume that they have the support of the freelance sector, because with this current state of affairs that’s far from being the case.”