The BBC has clearly been very naughty in recent years.
Ever since the Coalition came to power they have shown the sort of right wing bias that is only prevalent under dictatorships and fascism. Not only have they refused to report how bad every single piece of legislation this government have drafted is, they have been using personal service companies to employ their staff.
Personal service companies have been popular for many years, since the 1990s, in fact, probably encouraged by John Major’s government. So in 1999 Gordon Brown ended the practice by introducing anti avoidance legislation targeting personal services provided through intermediaries, commonly known as IR35.
What this did was levy a tax charge on the intermediary where the worker was basically an employee.
Brown’s genius lay in targeting the provider of services, rather than the deemed employer. This meant that the contractor was the sole recipient of an additional tax charge, and they were the ones who carried the risk of extra tax liabilities and the additional administration and legal costs that went with it.
Clearly, because the “employee” in the relationship was so effectively targeted and harassed, this would mean that they would demand to be made an employee and be put on the payroll. The employer would have to take them on or face replacing them with somebody else. And that somebody else might be one of the skilled foreign workers who would work for much less money.
So that sorted that out.
However, since the Coalition came to power it appears that the exact opposite happens. Instead of contractors demanding to be put on the payroll, employers have been demanding that their employees operate through personal service companies.
What’s more, most businesses who require something that constitutes personal services will opt for a company subcontractor rather than a self-employed one. I mean, all things being equal, why would you pick the option which carries a hefty potential PAYE liability?
Even government agencies and local government insist in many instances that they will only accept services from a company. Unincorporated businesses often aren’t even eligible to tender.
I reiterate, this has only happened since the Coalition came to government. IR35 has always worked perfectly prior to the neoliberals getting into office.
In 2010-11, IR35 was working so well that HMRC only had to raise 23 enquires into it. Remember that this was the number of enquires they’d be raising for accounting periods ending before late 2010. So that shows how well it worked. Only 23 attempts at defeating IR35. All successfully defeated, I imagine.
But now it’s everywhere and HMRC are out of practice. They are obviously victims of their own success.
This is what happens under the Tories. Laws that work perfectly well suddenly get used for the exact opposite of their intention.
Clearly the only way to get this problem sorted is to get Gordon Brown’s right hand man and natural successor, Ed Balls, into 11 Downing Street as soon as possible.
Then people will start doing what they were supposed to do which was the whole point of the law in the first place.
The thing you ought to take from this is that IR35 is good law that should not be repealed at all. You just need to vote Socialist.