Experts on contracting from two eminent trade bodies have publicly criticised comments made by Mel Stride, the UK financial secretary to the Treasury, regarding the likelihood of IR35 tax reforms being applied to private companies.
Speaking to parliament this week, Stride said there was an “issue of fairness” in deciding whether the public and private sectors should have the same set of tax rules.
He also said that evidence of 90,000 new contractors engaged between April and June shows that the reforms are increasing tax compliance, thanks to falling within IR35.
According to Simon McVicker, policy director at the Association of Independent Professionals and the Self-Employed, Stride’s comments indicate that Philip Hammond’s budget for November will once again target “hard working self-employed people”.
He added: “Changes to how freelancers operate in the public sector only came in recently and they have been a complete shambles.
“It’s ludicrous the chancellor would even consider extending these rules when the public sector roll-out has been so problematic.”
IPSE added that if the government is serious about targeting tax avoiders it should provide a statutory definition of what self-employment is.
These thoughts were mirrored by Samantha Hurley, operations director at the Association of Professional Staffing Companies, who added that the public sector was absorbing the extra costs of IR35.
She added: “We all pay taxes and subscribe to the fact that taxation should be fair. But there is little doubt that the government is approaching this issue from a position of assuming that all self-employed workers are avoiding taxation, which is simply not the case.”