IPSE statement on IR35

Yesterday (1st July 2020), Amendment 20 to the Finance Bill, which would have delayed the new IR35 legislation until 2023, was defeated in Parliament by 317 votes to 254. We would like to thank everyone who helped us to push this vital cause up the Parliamentary agenda and get such support from across the benches. The fact remains, however, that the government has a strong majority and is fixated on passing this damaging legislation.

We want to assure you that we will not stop applying pressure to government to get them to change direction on this. The legislation was already delayed because of the coronavirus crisis – a tacit acknowledgement from government that it would be a strain to freelancers and the economy. The UK is now facing one of the most severe economic crises on record. We will press the case that now is the worst time to push the damaging changes to IR35 onto an already under-supported and struggling freelance sector.

There is also broad understanding in Parliament that the changes to IR35 are really a patch for a taxation system that is ill-designed to deal with the modern and changing workforce. We have already talked to the Treasury about reviewing and reforming the overall tax system to make it fairer for employees and self-employed alike. Such reforms, implemented effectively, would make IR35 a moot issue.

The passage of this Finance Bill and its changes to IR35 legislation is disappointing and a setback. However, it is part of a much larger discussion about creating a modern tax system that works for self-employed people. Rest assured that we are already pressing ahead in this wider discussion, working hard to get a fair deal for freelancers.

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