Empowering the Freelance Economy

Echoes of Injustice: Parallels between the Post Office Scandal and IR35

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OPINION

Two seemingly disparate events in the UK share a troubling common thread: the unjust pursuit of individuals caught in the crossfire of poorly implemented systems. The Post Office scandal and the ongoing controversy surrounding IR35 both paint a stark picture of blame misplaced, lives shattered, and the need for urgent reform.

Post Office Horizon: Software Errors, Lives Upended

Between 1999 and 2015, over 900 sub-postmasters were wrongly accused of theft and fraud due to the faulty Horizon accounting software implemented by the Post Office. The system consistently generated inaccurate financial records, creating discrepancies that the Post Office, instead of investigating the software, aggressively blamed on the sub-postmasters. Lives were destroyed: livelihoods lost, criminal convictions endured, and even suicides linked to the immense pressures.

IR35: Confusion Reigns, Freelancers Bear the Brunt

IR35, a set of tax regulations aimed at ensuring self-employed individuals pay their fair share, has unfortunately become synonymous with uncertainty and fear for many freelancers and contractors. The rules, often complex and open to interpretation, have led to blanket assessments and a misplaced burden of proof placed on individual contractors to demonstrate their “true” employment status. Many fear losing work opportunities and falling into financial hardship due to potential tax liabilities.

Parallels in Peril:

Technology Triumphs over Truth

 In both instances, faulty systems were prioritized over individual livelihoods. The Post Office prioritized the flawed Horizon software over the sub-postmasters’ testimonies, while IR35 implementation often focuses on technical assessments without considering the lived realities of individual contractors.

Burden of Proof: A Weapon Not a Shield

 In the Post Office scandal, sub-postmasters were expected to disprove software errors, an impossible task. Similarly, under IR35, the onus is on the contractor to navigate complex rules and prove their self-employed status, even when the reality of their work may defy easy categorization.

Lives at Stake

Both events have inflicted untold personal damage. Sub-postmasters lost everything. The anxiety and potential financial fallout of navigating IR35 can be just as devastating for freelance careers and families.

Lessons Learned, Actions Needed:

The echoes of injustice call for action:

  • Accountability and Reform: The Post Office scandal has led to investigations and settlements, but the scars remain. IR35 needs thorough review and simplification to avoid similar pitfalls.
  • Supporting the Innocent: Both sides, sub-postmasters and contractors, need clear guidance and support. The Post Office owes victims full compensation and apologies. IR35 implementation should focus on education and collaboration, not wielding the regulations as a weapon.
  • Technology with a Human Touch: Technology should empower individuals, not entrap them. Both Horizon and IR35 serve as cautionary tales about prioritising tech solutions over human understanding and due process.

We must learn from these parallel stories of misplaced blame and rebuild trust. Both the Post Office scandal and IR35 demand attention, reform, and a renewed commitment to protecting the innocent caught in the system’s grip. Only then can we ensure that justice prevails and lives are no longer sacrificed at the hands of flawed systems and misplaced priorities.

HMRC’s game of snap with freelancers must stop

Following LBC radio presenter Shelagh Fogarty’s comparison of The Post Office scandal and IR35 Dave Chaplin, CEO of IR35 compliance firm IR35 Shield said:

“LBC’s Shelagh Fogarty was right to draw parallels between the Post Office scandal and IR35 on her show earlier this week.  Watching the ITV docudrama was like playing a game of snap with the Post Office and Mr Bates in one corner and HMRC and me in the other.”

Chaplin, a prolific campaigner for freelancers’ rights to remain independent and out of the crosshairs of IR35 lawsuits brought on by HMRC, offered his take on the similarities of injustice:

“Individuals were told that if they appealed to the court and won then HMRC would appeal.  Snap.  And the record shows that’s exactly what HMRC has done.

“Individuals were told they owe the government money without a full and thorough examination of the facts. Snap.

Chaplin believes the state is using unlimited legal firepower against individuals.  Stating that HMRC has used expensive barristers and solicitors in tax tribunals for years. “Snap,” he says, once again to make point of the game he sees HMRC playing with contractors’ lives.

“The state misinforming ministers on facts,” he continues: “Snap.  HMRC’s head, Jim Harra, recently relayed tribunal statistics to the Public Accounts Committee which were objectively wrong.

“Individuals giving up the fight and paying up despite their innocence. Snap.  Taxpayers have been paying HMRC because they cannot afford tax tribunals and fear doing so.

“Ministers responding to letters from MPs on behalf of concerned constituents. Snap.  Letters from successive Treasury Ministers, including the Chancellor simply signing responses drafted by HMRC without due scrutiny.”

In the case of the Post Office victims, I am pleased to hear that the government is considering quashing all the victims’ cases en masse.  When it comes to IR35, it is imperative that we see better treatment for UK taxpayers, which is why I have launched the Taxpayer Fairness campaign to address the evidence that tax authorities undermine the rule of law, leading to taxpayers becoming victims of taxing authorities’ abuse.

Chaplin says the basis of reform must ensure the tax authorities maintain strong powers to enforce and administer the tax law of their country, but be subject to stronger oversight, transparency, and accountability, with checks and balances aligned with the rule of law. 

“That is only fair,” he says.

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2 Comments
  1. Colin Haynes says

    Hi,
    I am a freelance engineer working inside IR35 for the first time in 28yrs. Can someone please explain why these umbrella companies simply take Apprenticeships Levy (without me agreeing to it) & why do I have to pay their employers. NI as well as my own. The rate I took the position on is literally half what it was sold to me at the beginning. Please help as I am about to simply jump ship. I am taking home less now than I was 20yrs ago!

  2. Amrik says

    I have encountered the same issues as Colin while contracting and working in IR 35 over the last 6 years. I also pay tax on amounts taken out by Umbrella company. ..

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