IPSE Contractors IR35 Demand
It’s the basic IPSE contractors IR35 demand that IPSE successfully fights on their behalf against the Government. After all, the sole reason IPSE was set up almost 20 years ago was to get the new IR35 legislation abolished.
How well do they think they have done so far towards that goal?
Questions on IPSE Contractors IR35 Demand
- Why does the Conservative Government keep attacking freelancers?
- What is the Conservative Government’s basic belief about contractors?
- Why the Government are wrong in their contractor beliefs?
- Why have IPSE not sold this contractor reality to the Government?
- What has IPSE not stopped the Government from doing?
- Do the Government understand freelancers case over IR35?
- What do the Conservative Government have planned for freelancers?
- What success have IPSE had in changing Government policy on IR35?
- Do the Government have any more IR35 changes planned for contractors?
- What will be the point of IPSE if all contractors are inside IR35?
- What do IPSE now need to do as regards IR35?
- What should IPSE do in terms of IPSE Contractors IR35 demands?
Why does the Conservative Government keep attacking freelancers
The Government feel they can make more and more attacks on contractors with impunity. They have no fear of contractors and their representatives.
They don’t believe there are any electoral consequences for them. Indeed the Conservatives, the party of business, have been even worse than Labour who brought in IR35 in the first place.
Almost every Budget or Autumn statement comes with a sting in the tail for contractors.
There are many people, including the big consultancies, who see contractors as marketplace rivals, who lobby the Government far more effectively than IPSE do.
What is the Conservative Government’s basic belief about contractors
The Conservatives basic belief, as expounded by both Theresa May and her Chancellor Philip Hammond, is that “It is an unfair anomaly that a self employed person earning £100,000 a year pays less tax than a permanent employee earning £100,000 a year.”
We all know that this is nonsense. It is not comparing like with like.
Why the Government are wrong in their contractor beliefs
There’s the extra risk that contractors take. Many contractors would not work for a full year. In a downturn contractors may spend many months without earning a bean.
Indeed, if they do not have the right skills when the upturn comes they may be out of the contract market altogether.
Also, permanent staff get many benefits that contractors don’t. These include sick pay, holiday pay, pension contributions, maternity pay, maybe share options even.
They are also missing out on potential promotions.
Why have IPSE not sold this contractor reality to the Government
This is all very clear to us.
So, why is it not clear to the Government?
It is IPSE’s main job to make sure that the Government fully understands what freelancing is. It’s their job to make the Government understand why Theresa May’s statement is nonsense.
Because this belief lies at the heart of every fresh attack on contractors by the Conservative Government in recent years.
Unless IPSE can change this basic belief then things are going to get progressively worse for contractors. This could lead to the end of freelancing as we know it in the UK.
What has IPSE not stopped the Government from doing
So, what has IPSE lobbying of the Government failed to stop them doing?
- Taking away the ability of Umbrella Company contractors to claim travel and subsistence against tax
- The rollout of IR35 reforms in the public sector which will transfer the determination of contractors’ IR35 status form the contractor to the hiring company
- The rollout of the IR35 reforms to the private sector in April 2020.
It should have been the easiest of tasks to persuade the current Tory combination of Prime Minister Boris Johnson and Chancellor Sajid Javid of the merits of the freelancers’ case.
Do the Government understand freelancers case over IR35
After all, Boris Johnson runs a personal service company himself for his various journalist articles e.g. in the Telegraph. He knows the problems PSC freelancers face.
Sajid Javid understands the freelance market too. He was a massive user of contractors when he was Managing Director of Deutsche Bank before he came into politics.
Indeed, he said at the time that the Government “should repeal the silly IR35 tax”. Sajid, it has got even sillier since then.
So, it should be pretty easy to convince this duo of the merits of the contractor case on IR35.
However, no one seems to have been able to do this successfully – and IPSE are the main lobbying group for contractors in the UK.
What do the Conservative Government have planned for freelancers
Let’s see what the contents of the Boris and Sajid’s Queen’s Speech are as regards contractors.
“We will increase fairness and and flexibility in the labour market by stopping employers and workers experiencing significantly different outcomes from flexible forms of working.”
First of all here was no mention of stopping or delaying the rollout of he IR35 reforms in the private sector in April 2020.
Secondly, it looks s if they plan more attacks on contractors and their income. The Budget to implement any changes here was cancelled because of the election.
However, there will be another Queen’s Speech and Budget shortly. We will find out what they mean then.
Is there any clues as to what this might contain?
What Percentage of Contractors do the Government believe are IR35 compliant
Well there is Treasury Minister Jesse Norman who said recently when answering a question in Parliament on IR35 “There is only 10% compliance in this area”.
One presumes he, Boris and Sajid intend to make the other 90% ‘compliant’ too. After all these years of IR35 they still believe that only one in ten contractors are compliant with IR35.
After all those 20 or so years of lobbying by IPSE, the Government still appear to believe that most contractors are just tax avoiders. They believe they just use personal service companies to avoid paying the tax they should pay.
What success have IPSE had in changing Government policy on IR35
In all these years, IPSE appear to have had no, or little, success in changing their minds on this.
All Conservative Prime Ministers and Chancellors appear to believe these erroneous thoughts on IR35.
David Cameron and George Osborne set in place the rollout of the IR35 reforms in the public sector.
Theresa May and Philip Hammond set up the rollout of the reforms in the private sector.
Now, Boris Johnson and Sajid Javid are going to implement those reforms
Do the Government have any more IR35 changes planned for contractors
They also appear to have something more in mind for contractors which was alluded to in the Queens Speech.
So, in all those years IPSE has not been able to be able to put the case for contractors effectively enough to stop Conservative Governments from continuously rolling out anti-contractor legislation.
If the Government do believe that only 10% of contractors are compliant with IR35 legislation then here will not be many PSC contractors left when this Government is finished with them.
What will be the point of IPSE if all contractors are inside IR35
So, what point will there be in IPSE then? They won’t even be able to sell them IR35 Insurance and Indemnity Insurance.
This is an existential threat to both freelancers in the UK and to IPSE itself.
Whatever they are doing as regards lobbying the Government against IR35, it’s not working.
As with the recently defeated Labour Party it is now time for a root and branch overhaul by IPSE.
What do IPSE now need to do as regards IR35
They need to get in front of Government to explain the case for freelancers. They need to convince them of the benefits of the flexible workforce.
Unless they can change he Government’s mind on this then contractors and the flexible workforce are doomed.
IPSE need to be able to explain the damage that will be done by he implementation of anti-contractor legislation.
IPSE need to take action now – and by action I don’t mean just another Press Release demanding this or that from the Government or criticising yet another attack on contractors by the Conservative Government.
If they cannot do this successfully then I fear here could be few contractors left in a couple of years time – and no IPSE.
After all, if all contractors will be ‘compliant with IR35’ then what is he point of an organisation set up to get it abolished.
What use is an army without troops.
What should IPSE do in terms of IPSE Contractors IR35 demands
IPSE, you have 22,000 freelancer members. There are 300,000 personal service company users in he UK according to HMRC. According to the OBR there are a million of them. There are 5.5m self employed in the UK.
That should be easily sufficient numbers to get the Government’s ear.
The clock is ticking IPSE.
And do it fast!
Please share this article using the social media buttons at the top and bottom of the page.
Ad – Contractor Services
Many private sector contractors are likely to be told by their client company either that they must operate as an off-payroll employee or join an umbrella company. It’s time to plan for that now.
They need to look at umbrellas ASAP.
Do you need an umbrella company that is right for you and returns you most? Fill out the form below to receive a call today.
For all necessary business insurance, including IR35, click on Business Insurance for Contractors