This week’s contractor news has needed a little unpacking.

On the surface, much of what’s happened has been positive – or, at least, could be viewed as progress. Hermes’ ‘self-employed plus’ contracts, as negotiated with GMB, and the seven-year Loan Charge repayment period for contractors earning less than £30,000pa sound like great wins for gig workers and the self-employed. In some respects, they are.

However, there are aspects of both that could come back to harm those contractors that they’re purportedly helping now. After all, it’s not like it hasn’t happened before: many NHS and BBC off-payroll schemes were actively recommended to workers and unfortunately, we’re all too familiar with how that’s panned out.

A tricky week of news to unpick, but here’s this week’s roundup of evasive takes.

Will the government further evaluate HMRC’s Loan Charge, without bias?

Ronnie Cowan, Shadow SNP Spokesperson (Infrastructure), asks:
To ask the Chancellor of the Exchequer, if his Department will take steps to evaluate all aspects of the 2019 Loan Charge and seek external evidence.

Mel Stride, Financial Secretary to the Treasury and Paymaster General, responds:
The government chose to accept New Clause 26 during the passage of the Finance Bill and will lay a report in line with the requirements of that New Clause no later than 30 March 2019. The report will include a comparison with the time limits for the recovery of lost tax relating to disguised remuneration loans.

The government also consulted extensively on the detail of the charge on disguised remuneration loans after it was announced at Budget 2016.

What does it actually mean?
To externally assess such a piece of legislation as the Loan Charge - something with the potential to devastate families - is a fair request.

What Mr. Cowan is actually getting at, however, is that existing evidence from previous external consultations is either inconclusive or simply not good enough to plough on with. HMRC bats this off with a response that’s getting a little tired – ‘the government says it’s fine’ – and don’t commit, which seems to be the taxman’s cookie-cutter approach to any opposition now.

It’s also worth noting that this question was not aimed at HMRC, but above them – at the government itself. I doubt Mr. Cowan was satisfied with the response.

How does employer’s payable tax after finding a worker inside-IR35 compare to that of a contractor’s payable tax?

Paul Sweeney, Shadow Minister (Scotland), asks:
To ask the Chancellor of the Exchequer, with reference to the IR35 reforms, how much extra tax is payable by the firm in addition to the fees paid to the worker when a firm classes someone as an employee for tax purposes; and what that tax payable would be for a worker charging £400 per day for their services.

Mel Stride, Financial Secretary to the Treasury and Paymaster General, responds:
The off-payroll working rules (sometimes known as IR35) only affect people working like employees and through a company. The recent changes to the rules in the public sector, shift responsibility for assessing the individual’s employment status from the individual’s company to the public authority.

If the engager contracts with the individual’s company, the reform also shifts responsibility for deducting the required employment taxes and paying employer National Insurance contributions (NICs) to the engager. Otherwise, this responsibility lies with the person paying the individual’s company.

The reform does not change the amount of tax payable by the firm engaging the worker. Both before and after the reforms employer NICs is due, and the £1.3 billion raised by 2023/2024 for the Exchequer is from increased compliance with the rules, not from any additional tax.

What does it actually mean?
HMRC doesn’t even try to tackle the maths in the specific tax scenario given by Mr. Sweeney. This is worrying for a government department that deals solely in percentages of income.

Alan Brown, Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy), asks:
The UK Government believe that there has been widespread abuse of the IR35 rules, even though only a minority of companies and individuals have ever been found to be in breach of the rules, and HMRC has lost cases against its own contractors. I have a constituent who operates as a self-employed IT consultant. Most of his work is in England, but under the new rules that the Government is introducing, any reimbursement that he gets for necessary flights and hotels will be treated as taxable income. This means that his business model will fail or that he will have to move from my constituency down to England. His overheads have already increased because of the additional insurance needed against any spurious HMRC investigations. Given that the Tories are supposed to be the party that protects entrepreneurs, can we have a Government statement or a debate—and possibly a rethink—on the impact of these rules changes?

Andrea Leadsom, Lord President of the Council and Leader of the House of Commons, responds:
The hon. Gentleman is raising a tax issue that is specific to his constituent, and he is right to do so in the Chamber. However, I encourage him either to seek an Adjournment debate or table a parliamentary question to Ministers, as it is not a matter to which I can respond from the Dispatch Box today.

What does it actually mean?
While this was asked in a Business of the House meeting and the response isn’t particularly relevant, it’s a great sign that IR35 is becoming an ever-more prevalent topic of discussion throughout the House of Commons.

Is the impact of the Loan Charge APPG already being felt or are the years of campaigning finally snowballing the subject throughout the government? Is it, judging from the fact that each MP that speaks on the matter has a particular constituent story to lead with, that contractors are talking and actually being listened to?

Either way, it’s great news for the self-employed that both IR35 and the Loan Charge are so consistently being challenged.

Takeaways for the week

While much of the news, and indeed the Q&As, from this week has been equal measures encouraging and frustrating, one thing is clear: both IR35 and the Loan Charge are finding their way into the mainstream.

Questions are being posed more often by more and more MPs. IR35 is being challenged openly now in general meetings, as opposed to being relegated to dedicated hearings. Emotive, personal stories about the Loan Charge are being heard and acted upon. Outright exasperation was heard during the Treasury Committee meeting when inquiring about the treatment of contractors by HMRC.

All of the above adds up to the realistic possibility of a Loan Charge and IR35 legislation change.

Take a look around our Knowledge Hub for more contractor guides, IR35 news and expert advice.