Lords committee slams Norman and government over IR35 legislation
A House of Lords Select Committee was critical of the government when one of its ministers gave evidence on the Off-Payroll reforms.
The government’s method of dealing with an errant clause that would seem to shut umbrella companies out of the equation in the controversial IR35 legislation came under fire on Monday when financial secretary Jesse Norman gave evidence to the Select Committee.
Members of the committee were highly critical of Norman and the government for not pulling and redrafting the legislation when they became aware that there was a problem before presenting it to Parliament.
Norman said that work was underway with “stakeholders” to develop “a candidate solution” to address the problem before the new IR35 rules, affecting the private sector, are implemented in April 2021.
Members of the committee used terms such as “uneasy”, “very concerned” and “not treating Parliament properly” in conveying their displeasure to Norman. They also questioned who the specific stakeholders were.
Norman said that the aim of carrying on with the legislation which, he said, contained “a technical error” instead of redrafting the entire document was to not disrupt the process or stakeholders further. He characterised the Lords’ reaction as an “overreaction” to the problem, which he said was a small part of a much wider piece of legislation.
Dave Chaplin, CEO of IR35 Shield, who uncovered the issues related to the errant clause in the legislation, responded to Norman’s appearance in front of the committee: “As the discussions indicated, HMRC and the Treasury contained defects before it was laid before Parliament, but then chose to do so anyway – and I agree with Baroness Kramer, who described this as ‘unacceptable’.”
Chaplin also noted that Norman made “some vague reference” during his appearance to a new tax test. “Please, no new subjective tests!” Chaplin said.
One of the Lords said at the end of the session that he expected the committee would be seeing Norman again soon. Norman smiled and said: “I look forward to it.”
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