Umbrella Company trade association, PRISM, a consistent advocate of tax and employment reform, has suggested that the timing of the government consultation on Off-Payroll Working in the Private Sector has been driven by Theresa’s May’s newly-unfurled plans to expand the NHS budget.
On Sunday, the prime minister announced an extra £25bn for the NHS over the next five years. But, the government has subsequently appeared evasive about where the extra funds will come from.
The period 2019-20 will see funding rise by 3.6%, amounting to an increase of £4.5bn on the existing 2018-19 allocation of £125bn. This does not take account of increased funding for the Scottish government, Northern Ireland, Wales, and also omits extra cash aimed at reducing NHS pension deficits.
When she unveiled the new funding plans, May implied that an unspecified proportion of it would be available from a ‘Brexit Dividend’, a claim dismissed as ‘tosh’ by one senior Conservative MP. The widely-respected independent public policy research establishment, the Institute of Fiscal Studies, also responded to the prime minister’s claim by explaining that, in their estimations, a ‘Brexit Dividend’ does not and will not exist, meaning that the only way of delivering increased funding will be through a combination of higher taxation and extra borrowing.
All this suggests that months before the Chancellor’s Autumn Budget, he is peering into a financial black hole that must somehow be filled if NHS spending commitments are to be met. PRISM’s view is that the government’s consultation on extending IR35 to the private sector is intended to be a quick fix for this problem.
PRISM CEO, Crawford Temple, said that the consultation appeared to be little more than a means to an already-predetermined end, which he described as ‘extremely disappointing’. Contributing to such consultations entailed considerable time, effort and cost for businesses and individuals, Crawford emphasised. He surmised that, should these contributions be disregarded in favour of the government’s preferred proposals, goodwill among many leading businesses will have been wasted.
Noting the lack of innovative, strategic thinking and planning in government tax policy and its preoccupation with the immediate present, he condemned the recourse to inadequate ‘sticking plaster’ measures and PR soundbites.
Crawford added: “There seems to be an air of complacency as a result of the low unemployment figures which could very easily come back and bite hard. Many commentators are now predicting slower growth resulting in diminishing tax revenues post Brexit.” PRISM, he said, will continue its work in favour of wider tax and employment reform commensurate with the modern business and employment landscape.