An Early Day Motion (EDM) was tabled earlier this week, calling for the British Government to review plans for the Private Sector IR35 Off-Payroll reform proposed for April 2020. This is yet more evidence of the strong opposition to these potentially ill-conceived reforms.
What is an EDM?
An EDM is a motion submitted for debate in the House of Commons for which no debate schedule has been fixed. This recent EDM is the newest sign of the clear growth in opposition within Parliament to the harsh private sector proposals. Fundamentally these proposals would increase the cost for private sector hiring firms to engage contractors by a preliminary 14.3%. That is a significant change which will cause massive repercussions rippling right through the entire contracting sector.
Leading on from the Westminster debate in April about the public sector rules and private sector proposals, this additionally shows some MPS are clearly in the corner of the contracting sector in their opposition of the Off-Payroll reforms.
However, this does not mean contractors can relax, far from it. Although some MPs have shown early support, their support may not actually translate into EDM signatures. So the EDM may not go anywhere and even if it does, it is unlikely to translate into any meaningful change of direction. However it does at least represent a small glimmer of hope.
What is included in the EDM?
The EDM was tabled by the Labour MP for Rutherglen and Hamilton West, Ged Killen. It brings to attention several issues with the proposals and threats it poses.
- Damage to the UK’s flexible workforce and economy
- The false employment risk for contractors – at a cost of around 30% of their income
- Escalating business project costs and limited access to key skills
- Deficiencies with HMRC’s Check Employment Status for Tax (CEST) tool
- The danger of unlawful ‘blanket assessments’ subsequent to CEST’s shortcomings
The EDM ends with calling on the Government to abandon the IR35 Off-Payroll private sector reforms if it is unable to commit to supplying sufficient support resources. These resources need to provide adequate support to companies in the private sector who are tasked with instigating and enforcing the rules.
MPs urged to support contractors to avoid Loan Charge repeat
The contracting sector has already had a lot of support from Parliament through opposition to the 2019 Loan Charge legislation. There were 154 MPs who signed the EDM tabled last year, which opposed the Loan Charge. The EDM resulted in a House of Commons debate which was attended by many but unfortunately it was not enough to stop the changes. If you’re still unsure about what the loan charge really means you can read more here: https://www.fpsgroup.com/blog/2018/09/13/the-2019-loan-charge-explained