New PM Liz Truss urges IR35 and loan fee policy review to go ahead

is reminding UK Prime Minister Liz Truss of her pre-election pledge to review the IR35 tax avoidance reform and address what she previously described as the government’s controversial “very bad” handling of loan charges.

During Truss’ Conservative leadership campaign, which eventually led to When she took office as prime minister today (September 6), she pledged to review the IR35 tax avoidance rules, which she claims are forcing genuine self-employed people to pay too much tax.

Contracted market stakeholders hold a considerable degree of commitment to this commitment Skeptical, they said, previous reviews of the rules had done little to address the problems and impacts created by IR35.

Now that Truss is in power, many of the same stakeholders are Called on her to deliver on her promises, while also reiterating their demand that her review must lead to “meaningful change”.

which includes the Institute of Independent Professionals and Self-Employed Persons (IPSE) Policy director Andy Chamberlain, who said his organisation was “looking forward” to working with Truss and her Cabinet on a review of the IR35 rules she promised.

“During the leadership campaign, Truss talked about ‘solving Orthodox Treasury thinking’,” he said. “If this review is to bring about meaningful change – which previous reviews have not – she will need to do just this: challenge the ideas that led to the enactment of this poor legislation. If she makes real progress on this issue, she Will achieve what the first three Conservative Prime Ministers could not achieve – to make one of the most dynamic and innovative parts of the UK economy thrive.” The way IR35 rules work in the public and private sectors has undergone reforms in recent years, introduced by the government which means that contractors are no longer allowed to The work done and how they are performed determines how they are taxed.

Instead, the responsibility for making these decisions has shifted To public and private sector organisations that employ contractors, these organisations are instructed by HMRC to use “reasonable care” in determining whether a contractor’s involvement should fall within or beyond the scope of the IR35 rules.

Internal IR35 determination means the contractor is treated as an employee oyees out For tax purposes, this means they must pay the same tax as permanent employees. This means they are responsible for paying Pay As You Go (PAYE) and National Insurance Premiums (NIC), and decisions outside IR35 mean contractors are taxed as non-wage workers.

One of the main and recurring criticisms of the rule is that , although in-house IR35 contractors are taxed the same as employees, they are not entitled to the same workplace benefits, such as paid sick leave or vacation. So, congressmen and campaign groups have raised concerns, This is thought to lead to an increase in the number of zero-entitlement employees, and anecdotal evidence suggests that the legislation also contributes to the “brain drain” of UK IT outsourcing talent.

Seb Maley, Chief Executive Officer of the contracting authority Qdos, stated that A thorough and fair review of the IR35 rules will go a long way in helping Truss and the Conservatives regain the support of the co-op. Engage the community.

“For a long time, freelancers, contractors and self-employed workers are ignored by the government and hit by short-sighted tax reforms and rate hikes that threaten this way of working,” Marley said.

“But to seize this opportunity, the new prime minister must deliver Her commitment. This starts with IR35. Ms Truss said she would review the IR35 rules, which are flawed and cause big problems not just for contractors but for the businesses involved.”

He added: “It must be prioritized Conduct an independent review of IR35 and lead to change – that is, if the new Prime Minister really wants to unlock the full potential of a flexible workforce.” Truss also reiterated her commitment to getting the job done at a meeting hosted by the Croydon branch of the Conservative Party on Thursday 18 August. The IR35 rule was reviewed when she was asked if she would support another independent review of the loan fee policy that has resulted in tens of thousands of contractors getting life-changing tax bills.

Loan Charge Policy, Budget 2017 Aims to Recover HMRC Claims The taxes the contractors avoided paying by choosing to own part of the sala were paid to them in the form of non-taxable loans between December 2010 and April 5, 2019.

It is well known that after the IR35 reform was introduced at the turn of the century, the loan There has been a proliferation of pay-based schemes, often marketed by non-compliant umbrella companies as HMRC – a way for approved contractors to increase their take-home pay by artificially reducing their employment tax liabilities.

Participated during the nine-year period ending April 5, 2019 Thousands of IT contractors for these schemes have received six-figure tax bills from HMRC, reportedly causing massive bankruptcies and contributing to at least nine suicides.

policy, Truss said: “In my opinion, The whole situation has been handled very badly and we’ll look at the specific issue of what we can do about it and we’ll also make sure that as part of our tax review we’re looking at IR35 and its impact because again, self-employed people don’t get The same benefits as the self-employed are paid by income, so we should do what we can to help those people.”

Loan Charge Action Group spokesman Steve Packham acknowledged to Trus how hard the policy was causing people within its reach life is welcomed.

“She was right to be shocked by 9 suicides, And HMRC’s handling of the whole issue has been absolutely right and the Treasury has been poor,” he said. “The time has come for a proper independent review of the whole thing, and most importantly, a fair resolution is needed to end the nightmare of thousands of families.

“We urge Conservative MPs to back the loan charge commitment and call on the Prime Minister to review and settle loans before more lives are lost Charge Scandal. ”

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