Contracting firms have written an open letter to the candidates of prime ministry, requesting them to stop the flawed and controversial Off-Payroll taxes in the private sector and remove the retrospective Loan Charge as well.
The letter warns of irreparable damage that both of these policies can inflict on the workforce. There was also a demand to rectify the wrongdoings of the present ministers.
Several prominent firms have signed this letter including FCSA (the Freelancer and Contractor Services Association), LCAG (Loan Charge Action Group), The Forum of Private Businesses, PRISM, ITContracting.com, WTT Consulting, FreelanceUK, ContractorUK, Stop the Off-Payroll Tax, and ContractorCalculator. They raised the following concerns regarding these policies.
- Why the Government seems hell-bent on approving the policy despite the lack of evidence.
- How HMRC has been let to operate with seemingly so much unchecked power?
- How much of injustices has the Off-Payroll Tax created along with its long-term impact?
- Why the ‘deemed employees’ employment rights were refused to be considered by the Government?
- How the Loan Charge was able to override previously formed statutory protections?
- How the UK workforce flexibility and economy have been damaged by its destructive impact?
According to an expert, Dave Chaplin, the analysis of the Economic Affairs Committee—where they were sceptical of HMRC’s power and called for a review in this regard—has turned out to be true; the taxman does exercise too much influence and power. As an example, Chaplin gave examples of the Loan Charge and the Off-Payroll Tax for prioritisation of tax yields rather than focusing on fairness. He added that the replacement of Theresa May must make sure they do not follow her steps and make the taxman accountable for their actions.
Although historically, the Conservative Government supported the entrepreneurial spirit, lately due to exploitative policies, it is hard to view them as a party that supports small businesses.
Experts were also quick to highlight the hypocritical nature of the IR35 in the letter such as when the Tory opposition opposed the IR35 regarding the Labour-led April 2000 creation.
Moreover, the Government introduced a reform that is being ridiculed by businesses as ‘an effective 14.3% stealth tax on business’ while rules have been created that pressurised contractors to seek false employment.
Mr. Chaplin recommended the succeeding Tory leader along with their cabinet that they have a chance through which they can rectify the injustices of the past.