Campaigners call on minister to secure funding to protect UK workers' rights
- Reference: 1633086912
- News link: https://www.theregister.co.uk/2021/10/01/campaign_uk_worker_rights/
- Source link:
In an open letter to Paul Scully MP, Parliamentary under-secretary of state in the Department for Business, Energy and Industrial Strategy (BEIS), supporters of better safeguards warn the failure to secure sufficient funding would expose workers to the continued abuse of employment rights and could lead to tax evasion by unscrupulous umbrella companies.
What is IR35?
IR35 is a tax reform that was unveiled in 1999 by the UK tax authorities. The latest regulation change - from April 2021 - will force medium and large businesses in the UK to set the tax status of their contractors and freelancers. Previously this was set by the contractors themselves.
Contractors found to be within the scope of the legislation – ie, inside IR35 – will have to pay more tax than they might expect.
The reforms are part of the government's crackdown on so-called disguised employment, where workers behave as employees but avoid paying regular income tax and national income contributions by billing for their services through personal service companies, which are taxed at lower corporate rates.
The letter was penned by tax expert Rebecca Seeley Harris, chair of Employment Status Forum, and James Poyser, CEO of inniAccounts and founder of campaign group offpayroll.org.uk.
In it, they insist that "regulation and enforcement are the best and only ways to protect workers' rights." And they reckon a fully resourced SEB would also "thwart unethical practices and overcome the widespread tax evasion in the umbrella market."
"We have made it clear in our submission," wrote Seely Harris and Poyser, “that if sufficient funds aren't allocated to the SEB, then existing bodies will need an urgent increase in funding to protect umbrella workers.”
[1]
In June, the government announced plans to tackle modern slavery, enforce the minimum wage, and protect agency workers. But in a last-minute change, it also agreed to bolt-on plans to [2]regulate umbrella companies which have seen a surge in popularity among IT contractors following [3]IR35 tax rule changes in April this year.
[4]UK.gov finally proposes to police rogue umbrella companies but leaves questions unanswered
[5]Campaigns propose new rules to protect contractors from rogue umbrella companies
[6]Another UK government limb that can't get IR35 right: Court service pays taxman £12.5m
[7]Tech contractor loses IR35 tribunal appeal: 'Right' to substitute didn't mean he could, say judges
While this was welcomed at the time, there were concerns that the eleventh-hour change of heart may not receive the full backing – or funding - required. With the deadline (September 30) for submission to the Government's 2021 Autumn Budget and Spending Review now closed, campaigners want to make sure that the officials responsible within the BEIS understand the importance of stamping out rogue practices.
"We remain steadfast to our recommendations that regulation of the market is an essential step to prevent further abuse of workers' rights and tax evasion," wrote Seely Harris and Poyser.
[8]
"We trust you will be representing this case with the Spending Review. It's time to act and stamp out mini umbrellas, unethical business practices and tax evasion by umbrellas, and create a system that positions the UK as a leader in global labour markets."
The letter also includes half a dozen examples where regulation would protect staff, including an estimated £2.5bn owed in holiday pay, and cites the recent cyber-attack on Giant Group last week – covered in The Register [9]here and [10]here – which left thousands of contractors in the dark and "unable to meet their financial obligations." ®
Get our [11]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YVcwxVvE8cisdPWASnQuBgAAAIk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://www.theregister.com/2021/06/10/uk_umbrella_company_regulations/
[3] https://www.theregister.com/2021/05/17/campaigns_umbrella_firms/
[4] https://www.theregister.com/2021/06/10/uk_umbrella_company_regulations/
[5] https://www.theregister.com/2021/05/17/campaigns_umbrella_firms/
[6] https://www.theregister.com/2021/08/23/uk_court_service_ir35/
[7] https://www.theregister.com/2021/06/15/techie_robert_lee_loses_ir35_tribunal_appeal_to_hmrc/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YVcwxVvE8cisdPWASnQuBgAAAIk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2021/09/24/giant_pay_outage_uk/
[10] https://www.theregister.com/2021/09/28/giantpay_confirms_cyberattack/
[11] https://whitepapers.theregister.com/
Will this stop "Off Shoring"
Off shoring, takes jobs away from people in UK
Is this just another modern day slavery method?
We also need to look at agency workers or fixed term contracts, they don't have the same rights as Employees even though they have been at the company longer than 2 years. No Sick pay, no holidays and having to accrue days and no redundancy or furlough when company changes strategy. Having to jump the hoops every year when a new contract is up for renewal. Nobody fights your corner, no union support and no help from Industrial tribunal.
Re: Will this stop "Off Shoring"
When contract is in scope, the business pays both employer and employees taxes on revenue, without having benefits of neither.
The clear intent is to prevent people from starting and running service based business. Big corporations have problems with hiring, so it is hard not to see that another hidden aspect of those changes is to force those ambitious people into employees market and make them work for those corporations. If you can't run your own business then what else can you do to put food on your table? It's a disgrace and shame that most journalists don't see that - they don't look beyond the surface.
IR35 was 'invented' by a tax bully infamous for his stealth taxes looking to tax a group of people who were not his core supporters, he did'nt even have the courage to announce it in his budget speech. I am talking about Gordon Brown. The Tories recent changes have only made things even more unfair and complex.
Your taxed as if your a employee, yet you receive none of the benefits of being an employee, its as per normal from government, its just take take take and give nothing in return
If you want to tax a person fine, but make sure that they get all benefits as well
But you are also your own employer, you effectively pay employer taxes as well, but you cannot operate like an employer - e.g. you cannot offset legitimate business cost against tax.
Jesse Norman said:
“Those who wish to challenge their employment status for rights can take their case to an employment tribunal, regardless of their tax status.”
This means if you are unhappy about your lack of employment rights, you can sue your own company!
The way to tell small businesses to go f themselves.
Wrong
The reforms are part of the government's crackdown on so-called disguised employment, where workers behave as employees but avoid paying regular income tax and national income contributions by billing for their services through personal service companies, which are taxed at lower corporate rates.
This statement is entirely wrong. Only difference is that in case of out of scope contract, the client does not have to pay Employer's NI (which is correct, because they are not an employer).
The whole reform isn't about tax avoidance, but it was intended to remove competition of independent contractors that big consultancies (and party donors) were upset about.
That's why government shuts any conversation about it.