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John Redwood raises concerns over IR35 and unfair tax system – London Business News

John Redwood, Conservative MP for Wokingham, took part in a parliamentary debate on taxation and raised concerns about the fall in self-employed numbers since 2019 and the impact of IR35 which has led to the decline of 800,000 self-employed workers and their importance. to the economy.

He also mentioned self-employed people who want to expand their small business, saying, “If a self-employed person takes the giant bureaucratic step of hiring an employee or two, they will have all the additional bureaucracy and taxes that come with it. . We need to make it as easy as possible for them to grow their small businesses…”

Commenting on John Redwood’s support for the self-employed and his recognition that IR35 has been damaging, Dave Chaplin, CEO of IR35 compliance company IR35 Shield, said: “John Redwood has made some very important points. The IR35 reforms have put a strain on truly small businesses and undermined the entrepreneurial spirit that drives our country’s economic growth.

“The objective of IR35, remember, was to “counter avoidance in the area of ​​the provision of personal services”, with the Inland Revenue stating that “the proposed changes only target engagements with essential characteristics employment “. The original IR35 press release from March 1999 also promised that “the main concern is to minimize any impact of these changes on ordinary businesses not involved in avoidance”.

“Small businesses, ordinary businesses, are the lifeblood of the UK economy and are being punished by an unfair tax system. Just recently, the long-running tax case between HMRC and IT consultancy RALC Consulting was heard and returned to the First Tier Tribunal for reconsideration. However, RALC Consulting is on the brink of insolvency and RALC ceased trading years ago due to ongoing uncertainty over the IR35 status of contracts entered into between 2010 and 2015, when Richard Alcock ran his small consultancy .

“The RALC is a shining example of how small businesses have been neglected and punished by a tax system that is not fit for purpose. We need to modernize and improve our tax system, and that means tackling taxpayers’ rights and HMRC’s abuse of power. HMRC acts with impunity and ignores honest self-employed workers. It needs a complete overhaul and must be held accountable. Currently he can exercise his powers without control, which is not correct.

“As John Redwood points out, we have lost 800,000 self-employed workers because of IR35 and some, like Richard Alcock, have been pushed into bankruptcy. IR35 reforms do not work and are anti-growth. They must be repealed and an alternative approach adopted. Parliament must urgently reconsider the IR35 reforms and their negative impact on entrepreneurship and economic growth in the UK.”