UK General Election 2020: Liberal Democrats agree to review IR35

The Liberal Democrats manifesto which was published yesterday (20/11/19) promises to review the changes to IR35.

Their manifesto reads: “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 Association of Independent Professionals and the Self-Employed (IPSE) are “delighted” to see this within the Liberal Democrats manifesto as well as other measures the body has suggested, such as:

    • Clamp down on late payment by requiring government agencies and large companies to sign up to the Prompt Payment Code
    • End retrospective tax changes like the loan charge
    • Extend parental leave and parental pay to freelancers
    • Reform Universal Credit to make it work for the self-employed
    • Simplify business taxation to lower administration costs

 

Andy Chamberlain, deputy director of policy at IPSE, said:

We are delighted that the Liberal Democrats have taken up so many of our policies to support the self-employed. In recent weeks, we have met with several senior Liberal Democrats, so it is excellent to see that our points have cut through.

The changes to IR35 will have disastrous consequences for the UK’s 5 million self-employed next April. Reviewing them is a definite step in the right direction. It would give IPSE the chance to make it clear just how harmful the changes to IR35 would be and put paid to them once and for all.

By adopting our policies to clamp down on late payment, reform Universal Credit, scrap the loan charge and ensure fair pay for freelance parents, the Liberal Democrats have committed to truly support the self-employed. They have laid down a gauntlet for the other main parties, who must now step up to back Britain’s freelancers.

Seb Maley, CEO of Qdos, an insurance and tax advice for the self-employed firm said:

This is a bold but very welcome statement of intent from the Liberal Democrats, that clearly recognise the importance of the independent workforce.

Of course, actions speak louder than words. Nonetheless, a review of IR35 reform would certainly be a positive step in the right direction. Meanwhile, reversing the devastating Loan Charge would come as a huge relief to tens of thousands of contractors who are facing massive retrospective tax bills.

In recent years, the Conservative Party has introduced a number of short-sighted tax reforms, such as IR35 changes and the Loan Charge. With the general election only weeks away, this will be on contractors’ minds as they head to the polls.

That the Liberal Democrats have shown they at least understand the issues most important to contractors will likely win them the support of independent workers who feel let down by the existing government.

Early this month (November), Helen Fospero, who is a former ITV presenter and now works as a reporter for Watchdog and The One Show defeated  HM Revenue & Customs (HMRC) tax bill of £80,000 at an IR35 tax tribunal case. IPSE believes this raises concerns regarding the Governmental tax department’s “credibility to oversee compliance with the changes to IR35 in the private sector.”