Autumn Statement Battle
Contractors group, IPSE (ex-PCG) were delighted this week after claiming that they, and their contractor members, had helped win the Autumn Statement batlle with the Chancellor.
Beforehand, Chancellor had ‘announced’ whether by his own words, or by leaks that he had authorised, that:-
- He was going to take away the right to offset travel and subsistence expenses against tax for both umbrella company contractors and personal service company contractors.
- He was going to aboilish intermediaries and force client companies to take all contractors onto their payrolls after they had been there a month.
- Set up a new online IR35 Test which contractors would have to sit. If they passed it they could contine as before with their limited companeis. If they failed they had to go onto the companies payrolls and their details would be stored by HMRC for future reference.
No Mention of IR35 Changes
In the Autumn Statement the Chancellor watered down the first one making it applicable only to those who were caught by the Intermediairies test (IR35).
There was no mention of the second and third proposals at all in the Chancellor’s Autumn Statement.
Great Lobbying Victory for IPSE
IPSE told their contractor members:-
“In recent weeks and months I have written to you to enlist your support in opposing measures which would harm the UK’s smallest businesses: the toughening up of IR35 and the restriction of travel and subsistence tax relief.
“Many of you have written to your MP, taken our surveys and attended our focus groups.
“With your help we have led a campaign to stop the Government from pursuing these harmful policies.
“Today’s Autumn Statement suggests our efforts have made an impact, but the fight is not over.”
Government Considering IR35 Options
They continued “There was no mention at all of IR35 in the statement or the subsequently published documentation.
“Shortly after the Chancellor finished his statement, senior officials confirmed to us that the Government is still considering its options on IR35.
“The Government have listened to IPSE and told us they will take more time to find a solution which protects the Exchequer and improves fairness in the system without creating disproportionate burdens on business, or widening the scope of the rules”.
Travel and Subsistence
As regards travel and subsistence IPSE said:-
“The tax relief will only be restricted where the contractor is caught by IR35.
“This is a big step in the right direction and it is what we called for in our consultation response, but we mustn’t be complacent.
“Until we know what is going to happen to the IR35 rules we may still find unfair, damaging restrictions being imposed”.
Big Success for Contractors Group
IPSE end by thanking their contractor memebrs for assisting their lobbying efforts.
“So a big thank you from IPSE for your recent efforts.
“You deserve a regulatory environment that lets you grow your businesses.
“Your success will only make the UK more successful and this is the message we will bring to policy makers”.
Contractors may have won the Autumn Statement battle but will they win the war?
There’s still the Finance Bill on December 9th.
Also, has the Chancellor really backed down, after lobbying from IPSE and their contractors, or is it just a tactical retreat?