Labour to Abolish IR35 Reforms
Contractors heard on Monday night of Labour plans to abolish IR35 reforms scheduled by the Conservative Government to take place in April 2020.
That really is a turn up for the book. As there are 5 million self employed it could even be an election game changer. The Lib Dems have already said that they would review the IR35 reforms. The SNP said that the IR35 reforms should be delayed till contractors concerns are addresses.
Contractor Questions on Labour to Abolish IR35 Reforms
- What was the Previous Labour Party Policy on IR35?
- What happened when the Conservative Party Promised to Abolish IR35 in 2010?
- How did we find out about the plans for Labour to Abolish IR35 Reforms?
- What IR35 Promise did Labour MP, Bill Esterson, make to Contractors Group IPSE?
- What is the Labour Party Policy now on IR35?
- Will Labour Abolish IR35 Reforms in the Public Sector?
- What should Contractors Group IPSE do now?
- What could the Conservative Party Offer on the IR35 Reforms?
- What Percentage of Contractors do the Conservatives Believe are Non-Compliant with IR35?
- Should Contractors Be Suspicious of an IR35 Review Promised by Boris Johnson?
- What Notice are the Mainstream Media Taking of Contractor Issues?
- Is Election 2019 the Best Opportunity Contractors Ever Had to Influence Government Policy ?
What was the Previous Labour Party Policy on IR35
Previously the Labour Party’s policy was, in the 2017 Manifesto, that if someone did work for a company the default was that he, or she, was an employee – unless the company could prove otherwise.
Perhaps this change of policy is, in American Football terms, a ‘Hail Mary’, i.e. an all or nothing long pass into the end zone with seconds left on the clock.
The reason for the sudden change is not so important as clarifying that it is indeed correct.
What happened when the Conservative Party Promised to Abolish IR35 in 2010
Remember that prior to the 2010 election the Conservatives told IPSE and other contractors that they would abolish IR35? When they came to power they did the complete opposite.
Not only did they not scrap it but they strengthened IR35 at ever opportunity they could. And their Queen’s Speech a few weeks ago showed they had fresh IR35 plans for contractors.
So, what do we know so far?
How did we find out about the plans for Labour to Abolish IR35 Reforms
Contractors Group IPSE set up a meeting on Monday night where representatives of all the main parties were present. Questions were put to them by contractors at the round table meeting.
It was at this that Labour MP, Bill Esterson, said that the Labour Party would scrap the coming IR35 reforms which Boris Johnson and Sajid Javid aim to implement next April.
That’s despite Sajid Javid telling the Government a few years ago that they should “repeal the silly IR35 tax”. That’s in the days soon after he was Managing Director at Deutsche Bank and had just entered politics. Charitably, let’s say he has had a sudden change of mind.
Bill Esterson is Labour’s Shadow Small Business Minister.
What IR35 Promise did Labour MP, Bill Esterson, make to Contractors Group IPSE
Questioned by IPSE, Bill Esterson astonishingly replied “It should never have been implemented in one go.
“We absolutely cannot see it rolled out into the private sector the way things are at the moment.”
And in that moment he may have changed the course of Election 2019.
The astonished IPSE officials asked for clarity. Was this now Labour Party policy or was it a rogue MP talking off the top of his head?
What is the Labour Party Policy now on IR35
MP Bill Esterson could not have been clearer. This is now official Labour Party policy he said.
He confirmed that Jeremy Corbyn and the Labour Party would stop the April 2020 IR35 reforms in their tracks.
This really is a turn up for the books. No one was expecting this. IPSE, I presume, are engaged in getting further clarification on what the Labour Party means.
Do they mean they will never implement the reforms or are they just seeking more time?
Will Labour Abolish IR35 Reforms in the Public Sector
Will they scrap the IR35 reforms in the public sector implemented by the Conservative Government in 2017?
Although he did not say it explicitly, he criticized the deployment of IR35 in the public sector.
He said “In the public sector, it is….. causing real problems for self-employed professionals who need to get contracts. It is causing real problems for the public sector as well.”
What problems did Bill Esterson mean in the Public Sector
He said “We are seeing a reduction in the availability of skilled workers in the health service and elsewhere as a result,” Mr Esterson said, adding – crucially. “There needs to be a fundamental review.”
Well, he and Labour seems to have ‘got it’ – except for that very last word “review”.
Contractors need to be very careful. We were here in 2010 when Cameron and Osborne told contractors they would abolish R35 and promised a review. After the review they decided to keep it and to keep strengthening which they have done at every opportunity.
At the time IPSE were delighted and rushed out a Press Release about the ‘review’.
The Liberal Democrats have also promised a review of he IR35 Reforms.
What should Contractors Group IPSE do now
Unlike last time in 2010 IPSE must nail down precisely what each party’s IR35 policy is. Promises of a ‘review’ should not be good enough this time around.
There’s always the possibility that the Conservative Party react to this as they see both Labour and the Lib Dems making a play for the 5m self employed vote.
This must be very exciting for the self employed as no one has taken a blind bit of notice of their plight in any previous election. That’s except to say that they would tax them more.
This may be the first election when the self employed become a factor.
It is very exciting.
What could the Conservative Party Offer on the IR35 Reforms
If the Conservatives do decide to match Labour by promising to scrap the IR35 reforms it would be great news. That’s especially as they are most likely to win.
However, contractors would be very suspicious of their sudden Damoscene conversion
That’s especially as they said just a couple of weeks ago, in the Queen’s speech, that “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.”
We know what that means.
This echos Theresa May’s statement that “it is an unfair anomaly that a self employed person earning £100,000 a year pays less tax than an employee earning £100,000”.
What Percentage of Contractors do the Conservatives Believe are Non-Compliant with IR35
Jesse Norman said in answer to a question in Parliament on IR35 that there is only “10% compliance in this area. This must mean that they have other ‘treats’ in store in the December 19th budget.
It would be difficult for them to backtrack now after showing us what they really believe, i.e. that 10 times as many contractors should be paying PAYE as currently do.
It would be fantastic for contractors if they did a sudden back-flip.
Should Contractors Be Suspicious of an IR35 Review Promised by Boris Johnson
However, I would think that contractors would be very suspicious of a ‘review’ suddenly being offered by Boris Johnson. That’s unless they believe him to be more of a man of his word than Cameron and Osborne.
This is great news from the Labour Party and well done to IPSE who set up the meeting.
What Notice are the Mainstream Media Taking of Contractor Issues
This all appears to be happening behind the back of the mainstream media who like the political parties previously, are taking very little notice
However, Labour’s new policy on IR35 could be a silent game changer in this election – and no one would ever ignore the pleas of the self employed again.
But it is crucial for IPSE to pin the parties down. They need to get rid of the word ‘review’ and not change it for a synonym.
The media are headlining on whether Jeremy Corbyn is Anti-Semitic or not (and it is an important issue).
However, to put things into perspective there are 200,000 Jewish people in Britain and 5 million self employed.
Yet this promise by the Labour Party didn’t even merit a mention on any news or election analysis programmes that I saw.
Just to be clear on this, I am not arguing that Jeremy Corbyn’s alleged Anti-Semitism should not be an election issue. It is an imporatnt issue. I am arguing that contractors and freelancers issues should be election issues
Is Election 2019 the Best Opportunity Contractors Ever Had to Influence Government Policy
The next two weeks are contractors’ biggest opportunity to get things done. They are now being listened to by the parties (even if not the media).
Now they must pin them down to exact policies.
But , even with those caveats, this is great news for contractors across the UK. If Labour abolish IR35 reforms ready to be implemented by the Conservatives that would be great.
But keep the champagne on ice for now.
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