Campaigning against IR35 but braced for the Budget
- 06 Mar 2020
It’s been a tumultuous month in Westminster. The government-led review into IR35, which IPSE was quick to brand as ‘recklessly inadequate’, was published. IPSE took to the streets for an organised IR35 protest. We gave evidence to the House of Lords Sub-Finance Bill Committee’s IR35 inquiry. Our policy team has been meeting with several MPs across all parties to highlight the issue. We updated members via a webinar and we’ve been doing a huge media push as well. IPSE has featured in the FT, Times, Telegraph, City AM and on radio, including my appearance in an hour long ‘IR35 Special’ on LBC. In a shock move, the Chancellor was replaced. And over the course of the last few days the media agenda has been completely taken over mounting concerns of a Coronavirus epidemic here in the UK.
When the Conservative Party pledged, during the election campaign, to review the IR35 changes we were quick to praise them. IPSE and others had campaigned hard to raise the profile of IR35 in the lead up to polling day and candidates were being asked about it on the doorstep. Conservatives were the last of the parties to concede to a review and we hoped there was a chink of light at the end of the tunnel.
When the review was launched in January we were immediately disappointed. There was no independent Chair, no thorough impact assessment and, crucially, no delay. It was unsurprising therefore, when the review published last week, that no meaningful changes to the policy had been made.
This is calamitous legislation and it is taking its toll on business right now. IPSE members will not need reminding that many large hiring organisations have ceased engaging contractors altogether. I met with the Financial Secretary Jesse Norman yesterday and expressed our dismay at the failure of the review to take this into account. We had hoped that the introduction of Rishi Sunak as Chancellor might provide the perfect opportunity for a rethink and we wrote to him to make the case for exactly that. We hope to meet with him soon so we can explain, face-to-face, why the policy is badly misguided.
Meanwhile, in ‘the other place’, the Finance Bill Sub-Committee’s inquiry into the private sector changes continues. IPSE gave evidence, and along with most – if not all – the witnesses that appeared before the committee, made it clear that the government should urgently reconsider its approach. The committee will not report until after Wednesday’s Budget, and quite possibly not until after 6th April. It seems unlikely therefore that it will influence the legislation, but IPSE looks forward to reading it all the same and seeing how the government responds.
IPSE is still fighting for the policy to be scrapped, but we also have a duty to prepare members, as much as possible, for the changes. We ran a webinar earlier this week on what the new legislation will (probably) look like – final legislation won’t be published until 19 March. We also took the opportunity to update members on our lobbying activities. You can watch a recording of the webinar here. We will do another webinar on Monday 16th March on the Budget – you can register for that here.
It hasn’t all been about IR35. The Coronavirus is a major concern for parts of the economy, but the self-employed are likely to be hit first by any economic downturn that results from it. IPSE has spoken a great deal in the media on this issue. We are calling on the government to set up a crisis fund that can be accessed by any self-employed people – limited company contractors or sole traders – that may suffer loss of income. We’ve also set up a webpage which we will keep updated as developments occur.
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