NO TAXATION WITHOUT REPRESENTATION!

RMT helpline 0800 376 3706 :: march 2020 :: RMTnews 10 A recent protest at parliament saw hundreds of workers protesting the introduction of anti-avoidance tax legislation ‘IR35’ contained in the 2017 finance bill due to come into effect this April. IR35 is ostensibly aimed at recovering tax at the appropriate rate from what the HMRC has designated ‘disguised employment’ – individual contractors employed through a system whereby they have set up as a limited ‘personal service company’ providing a service of ‘labour’ rather than having a contract of employment. In such cases workers employed in this way only pay corporate tax rather than income tax and national insurance contributions, but are not legally regarded as a ‘worker’ forfeiting all legal protections and statutory employment rights. IR35 shifts the onus from individual contractors to nearly all employers for assessing the employment (tax) status off all ‘off-payroll’ workers hired and making them liable for the employers’ national insurance contributions they have so far avoided. Personal service company contractors will now be taxed the same as directly employed workers, in some cases they will also be liable for paying the employers national insurance contributions too, but crucially, without any legal or statutory employment rights. The incoming legislation is thought to affect as many as 200,000 workers. At the top end of the market in labour contracted through personal service companies highly skilled specialists who often work nationally as genuine temporary/freelance contractors for whom direct employment is unsuitable. However, that does not mean such individuals should be bereft of basic workers’ rights or have to face a financial penalty. At the mid-level of the market skilled workers in addition to the sudden financial impact face a sudden shift in employment practices by employers seeking to protect themselves from the incoming legislation. At the lower end of the market unskilled and semi- skilled workers such as transport cleaners find themselves hopelessly exploited carrying out permanent work functions at the bosses whim. Nearly all personal service company contractors use one of the myriad of umbrella companies, often a subsidiary or holding of the company contracting them to handle their tax and pay arrangements mediating between them and their employers. NO TAXATION WITHOUT REPRESENTATION! New anti-avoidance tax legislation ‘IR35’ due to come into force next month will hit contractors hard warns RMT regional organiser Eddie Dempsey