IPSE Advises the Government to Get Rid of IR35

HM Revenues and Customs (HMRC)’s IR35 reform has garnered a lot of criticisms. The Association of Independent Professionals and the Self Employed (IPSE) has advised the government to support the contractors and avoid extending the off-payroll working rules to the private sector.

According to the policy development manager of IPSE, Jordan Marshall, the IR35 reform will result in overtaxing of hardworking contractors. Moreover, it will place an increased administrative burden on the businesses.

Marshall has said that the Government needs to do more to ensure that its claim to being small business friendly is not an empty promise. He had cited the Government’s planned increase in the National Insurance Contributions last year that was withdrawn after pressure from business groups, Conservative MPs, and agencies such as the IPSE.

Instead of supporting the 4.8 million self-employed individuals in the UK, the present Conservative government appears to be viewing them as a cash cow that should be milked to increase profit. In the past one and a half year, the Government has increased the likelihood of reduced VAT threshold, reduced dividend tax allowance, and pledged to remove Class 2 NICs that benefited self-employed traders.

According to Marshall, the punitive approach against the contractors and freelancers wasn’t always the case. The coalition with the Liberal Democrats and Conservatives had created a business-friendly environment. The Corporate Tax rates were attractive that provided an innovative push to the economy. Furthermore, the coalition Government had taken firm measures to ease the hardship faced by small businesses and sole traders due to late payments by appointment of a Small Business Commissioner.

The current Conservative leadership has ignored the role played by contractors and small business owners in the economy. The proposed IR35 reform in the private sector will have grave repercussions on the economy, according to Marshall.

The government should do the right thing by getting rid of the reform. It should consider the consultation responses and criticisms and scrap the reform. This is in the best interest of not just the contractors and small businesses but also the Government.

Although at the moment the scenario remains a Utopian dream, the IPSE has stated its resolve to put pressure on the Conservatives to support the economy. The agency will persuade the Government to offer support to freelancers, small businesses, sole traders, and contractors. To this end, the agency is advising contracting professionals to write to their respective MPs to end IR35 for the good of the country.

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