How seriously is the Government taking the Lord’s damning verdict on IR35?

Not very seriously, appears to be the answer. Indeed, despite the Lord’s scathing Report being published on Monday 27 April, later that day, the financial secretary to The Treasury, Jesse Norman, told the Commons that the Government still intends to include an amendment to enable the private sector off-payroll scheme to be enacted in the proposed 2020-2021 Finance Bill to start on 6 April 2021, stating: “The Government remains fully committed to introducing these reforms to ensure that people working like employees, but through their own limited companies, pay broadly the same tax as the individuals employed directly”. His only comment, which seemed to take on board anything said by the Lords, was that the Government would use the next 12 months to seek external research on the long-term effects in the public sectors before they are introduced into private sectors.

With all due respect, the response seems to miss the point being made. The concerns that many witnesses interviewed by the Lords in their inquiry had raised was that if these contractors are paying broadly the same tax as employees, consideration has to be given to the rights of those contractors to avoid them being “zero-rights employees” and in an “all pain and no gain” situation. The comments on behalf of the Government also sadly ignore the impact and huge costs to businesses of this flexible workforce becoming far less accessible to them, and more costly.

It seems that the real impetus in continuing along this route, despite the comments, is the need for revenue generation under the guise of an ostensibly fairer regime.

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