Government should not make laws with known flaws in them, says Lords committee report

Prior to it being laid, the Government became aware that this SI, Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020 (SI 2020/1220), has a flaw in it which unintentionally widened the definition of an intermediary.

The Government should not be making legislation which it knows does not reflect its policy intent.

This is the main finding and conclusion of a short report, 'Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020', published today by the House of Lords Economic Affairs Finance Bill Sub-Committee.

Lord Bridges of Headley, Chair of the Economic Affairs Finance Bill Sub-Committee, said:

“The moment the Government knew there was a flaw with this statutory instrument it should have been withdrawn and corrected. Our Committee couldn’t find any precedent for this breach of good government.

“The Government has now assured the Committee that the regulations will be amended before they come into force in April 2021, so they fully reflect what the Government had intended. It has also committed to not repeating this kind of behaviour in the future.”

This short report follows the April 2020 publication of the Sub-Committee's previous report, Off-Payroll working: treating people fairly. This report expressed concern that the off-payroll working rules built on the existing anti-avoidance legislation, which were flawed and had proved difficult to operate over a 20-year period.

The report called on the Government to keep its promise on implementing the recommendations of the Taylor Review: that the taxation of labour should be made more consistent across different forms of employment, and that there should be a fair balance between tax, rights and risk.

Read the report on the Committee's website

The Finance Bill Sub-Committee's main report on the draft Finance Bill 2021 will be published on Saturday 19 December.