Asked by: Paul Beresford (Conservative - Mole Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the number of workers who only hold contracts covered by the off payroll working rules.
Answered by Jesse Norman
The Tax Information and Impact Note (TIIN) published in July 2019 sets out that HMRC estimate that 170,000 individuals working through their own company, who would be employed if engaged directly, would be subject to the off-payroll working rules. Individuals may have multiple engagements through their own company, with some engagements subject to the off-payroll working rules and some not. Those who are complying with the existing rules should experience little impact. The TIIN can be found here: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020/rules-for-off-payroll-working-from-april-2020.
The impact of the delay to the changes of the off-payroll working rules will be published at the next fiscal event and will be subject to the scrutiny of the Office for Budget Responsibility.
Asked by: Paul Beresford (Conservative - Mole Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the covid-19 outbreak on workers covered by IR35 rules.
Answered by Jesse Norman
While no specific impact assessment has been made of the potential effect of COVID-19 on individuals affected by the off-payroll working rules (commonly known as IR35), the Government has recently announced that the reform to the off-payroll working rules for people contracting their services to large or medium-sized organisations outside the public sector will be delayed for one year, from 6 April 2020 until 6 April 2021. This is part of the additional support the Government is providing for businesses and individuals to deal with the economic impacts of COVID-19.
It is right for the Government to do whatever it can to support all parts of the labour market at this time. The Government remains committed to introducing this policy in order to address the unfairness of non-compliance with the existing off-payroll working rules. However, it also recognises that the reform is a significant change for both businesses and contractors. Delaying the reform will support them, as they will not need to implement and adjust to the reform until next year.
The Government very much values the contribution of flexible workers to the UK economy, but it is also under an obligation to ensure fairness between individuals who work in a similar way. The Government has published a factsheet which provides further information on the reform: https://bit.ly/2Uu50k8
Asked by: Paul Beresford (Conservative - Mole Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of jobs that (a) have been and (b) will be lost in the UK as a result of the planned IR35 off-payroll roll-out.
Answered by Jesse Norman
The off-payroll working rules are designed to ensure that someone working like an employee, but through a company, pays similar levels of tax to other employees. It is fair that individuals who work in a similar way should pay broadly the same amount of tax. The rules do not apply to the self-employed or stop anyone working through their own company.
The Government has not seen any evidence that indicates an overall change in demand for the services and skills that contractors offer. Independent research on the impacts of the reform in the public sector showed that it did not reduce market flexibility or impact use of contingent labour. This research will be updated and shared with parliament before the reform applies in April 2021. Furthermore, at Budget 2018 the independent Office for Budget Responsibility (OBR) did not judge the upcoming reform to have any specific macroeconomic impacts.
The Tax Information and Impact Note (TIIN) published in July 2019 sets out HMRC’s assessment that the reform is expected to impact 170,000 individuals working through their own company, who would be employed if engaged directly. Those who are complying with the existing rules should feel little impact. The TIIN can be found here: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020/rules-for-off-payroll-working-from-april-2020.
Asked by: Paul Beresford (Conservative - Mole Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether workers covered by IR35 rules are eligible for (a) Self-Employment Income Support Scheme, (b) the Coronavirus Job Retention Scheme and (c) other financial support schemes established by the Government to support people facing loss of work and income as a result of the covid-19 outbreak.
Answered by Jesse Norman
The Government has announced a package of support for individuals to deal with lost income and the costs of absence due to COVID-19. For those within the off-payroll working rules working in the public sector, the Government expects many public sector organisations to continue to pay staff and not to furlough them.
Owner-managers paying themselves a salary through PAYE can benefit from the Coronavirus Job Retention Scheme (CJRS). For companies with a sole director, directors can continue to undertake their statutory duties while furloughed and still be eligible for the CJRS, as long as they do not work beyond these duties. They can use the CJRS portal to claim for 80% of usual monthly wage costs up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions for that wage.
Individuals who are employed by a Personal Service Company (PSC) are entitled to statutory sick pay (SSP) on the same terms as any other employee. PSCs which are eligible and make payments under SSP as a result of COVID-19 will be entitled to a rebate where they meet the criteria of that scheme. Those not eligible for SSP (e.g. the self-employed and very low earners) will be able to receive support through the benefits system.
SMEs may also have access to support through the temporary Coronavirus Business Interruption Loan Scheme (CBILS). CBILS supports SMEs with loans, overdrafts, invoice finance and asset finance of up to £5 million, for up to six years. In addition, the Government has created the Bounce-Back Loans Scheme, which is designed to ensure that the smallest businesses can access loans of up to £50,000 in a matter of just days. More information about the full range of business support measures is available at www.businesssupport.gov.uk/coronavirus-business-support/.
Individuals who have paid sufficient National Insurance Contributions, including through multiple jobs, will be entitled to new style Employment and Support Allowance. If they have not made sufficient contributions, they can apply for Universal Credit. These individuals will benefit from the Budget announcements to remove the seven day wait in new style Employment and Support Allowance and, if they are self-employed, the Minimum Income Floor in Universal Credit.