As one of the most controversial pieces of taxation legislation, IR35 has long been on the hit-lists of a number of organisations that represent contractors and other independent professionals. Many people have requested that the government review the regulations to make them less complex and more user-friendly, but now the government’s recently appointed self employment ambassador has joined the list of people who are keen to change the way the legislation works.
David Morris has spoken about the Intermediaries’ Legislation in less than glowing terms, calling it ‘unnecessarily complicated’ and vowing to tackle the confusion surrounding it. Mr Morris has pledged to come up with ‘new ideas’ and promised to look into potential ways of making the legislation work better for those who have to use it over the coming months.
His comments come on the back of an employment lawyer who has expressed his concern over the planned introduction of the statutory employment test which has been called the ’80:20’ rule. Darren Hayward of law firm Nockolds has written about the potential problems inherent in the proposals put forward by the Office of Tax Simplification who were one of four organisations who have been given the thankless task of reviewing IR35 with a view to trying to improve it.
The idea put forward by the OTS, that a contract lasting six months or more would automatically be considered an employment relationship was one which Mr Hayward found particularly concerning. He believes that the number of freelancers and contractors who work with a single client for years would mean that the entire face of the UK’s independent workforce could change, should such a rule be introduced.
Even the OTS admit that there are significant drawbacks to the idea of the 6 month rule, and Chris Bryce of the Association of Independent Professionals and the Self Employed agrees that it is not an ideal solution to the problems of IR35. In his role as a representative of the freelance community, Mr Bryce is keen to work with the government to come up with a solution which works for those who will actually use it, and the suggested six month rule does not fit that bill.
Mr Morris has told the Prime Minister that he intends to take on the challenge presented by IR35, citing the uncertainty that it creates alongside its complexity and costs in his criticism of the current regulations. IPSE are pleased that Mr Morris seems to be determined to take on IR35 given that it has been one of the most admin-heavy and time-consuming pieces of legislation that small business have to comply with.
Any contractor who is concerned about the potential effect of IR35 on their employment status should consult an expert for advice and information. Our specialist accountants have an in-depth understanding of how the legislation works and can ensure that you are doing everything you need to stay compliant. For more information on any aspect of how we could help you with your finances, call us today on 01253 362062 or email us at firstname.lastname@example.org.