What are the political parties saying about IR35?
Posted on 11th December 2019 by Marketing Executive - Katherine Ducie
In April 2020 the contractor and freelance community are set to be hit by changes to IR35 legislation which could result in higher taxes for contractors.
The changes which will alter how freelancers’ taxes are assessed is feared to have potentially damaging effects for some self-employed contractors.
Aligning the legislation between the public and private sector, the changes will mean that companies employing contractors are responsible for assessing the contractor’s tax status, instead of the contractor assessing this themselves.
There are now over 4.6 million contractors in the UK, adding around £275bn to the economy last year. With this large figure, the three main political parties are attempting to show their support to the freelance community.
Ahead of tomorrow’s general election, here’s a round of what the political parties have to say on changes to IR35 in the private sector and what they propose to help mitigate any harmful effects.
While it was the conservative party who introduced the policy change, they are promising a review of the policy if they are to win the election.
Chancellor of the Exchequer, Sajid Javid, said: “I value the work of consultants and I want to make sure that the proposed changes are right to take forward.”
He added: “We’ve already said that we’re on the side of self-employed people. We will be having a review and I think it makes sense to include IR35 in that review.”
The labour party have pledged to halt the roll-out of IR35 changes.
Labour’s Shadow Small Business Minister, Bill Esterson, said at a recent freelance and small business event: “We absolutely can’t see it rolled out into the private sector the way things are at the moment.”
He added: “We need to support the self-employed in this country. We need to make sure that our tax system is diverse so that it matches the needs of being self-employed and is also consistent with the risk that is taken.”
Labour’s response to IR35 changes has been positively welcomed by the Association of Independent Professionals and the Self-Employed (IPSE).
Similarly, to the other two main parties, the Lib Dems have citied a commitment to review IR35 changes in their manifesto.
Under the section ‘Fair Taxes’, it reads: “We will end retrospective tax changes like the loan charge brought in by the Conservatives, so that individuals and firms are treated fairly, and review recent proposals to change the IR35 rules.”
The Lib Dems share contractors concern over the accuracy of HMRC’S IR35 test, Check Employment Status for Tax (CEST) and are proposing new legal tests for determining a freelancer’s employment status.
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