Contractors give guarded welcome to Lib Dem IR35 reform review

The Lib Dems have pledged to review IR35 reform, some 24 hours after ContractorUK asked the party if its leader’s objections to the April 2020 changes would become official policy. 

Under ‘Fair Taxes,’ the Liberal Democrats say in their newly published manifesto that a Jo Swinson-led government would “review recent proposals to change the IR35 rules.”

The wording indicates that IR35 reforms in the public sector would not be part of the review – whether it would be independent or not, despite the 2020 proposals being based on them.

'Progressive'

Nonetheless, Chris Bryce, boss of contractor body IPSE yesterday described the Lib Dem’s commitment to an IR35 reform review as “progressive” and “freelance-friendly.”  

“They've paid attention to the IPSE manifesto,” Mr Bryce added, referring to the body’s call on November 1st for the IR35 changes to be repealed, or have their 2020 introduction delayed.

Pressed about the commitment, an IPSE spokesman acknowledged to ContractorUK that a Lib Dem government ‘reviewing’ the framework did not mean it would be ‘abolishing’ it.

'Calamitous'

But the mere existence of a review which, presumably, industry can participate in means ‘policymakers will be left in no doubt about the catastrophic impact the changes would have.’

The Association of Independent Professionals and the Self-Employed (IPSE) also said: “We are delighted to see the Lib Dems commit to reviewing the calamitous proposed changes to IR35 in the private sector.

“This measure will be disastrous, not just for contractors but for the businesses they work with and the economy as a whole.”

Online yesterday, individual PSCs were generally supportive of the review pledge but some sounded less optimistic, pointing out civil servants and Treasury officials outlast governments.

Even those contractors who did suggest the review would likely be independent of HMT or HMRC, said many ‘reviews’ had been conducted before and often, like the PSC committee, with little impact.

'Hold them to account on November 25th'

But Andy Chamberlain, IPSE’s deputy policy director, sounds like he isn't going to let policymakers off the hook – and will get representatives of all the political parties around a table to commit further to contractors on November 25th.

“We want to hold all the main parties to account on what they will do for our vital sector and press them to commit to freelance policies,” he said, referring to IPSE's ‘self-employed hustings’ event this coming Monday evening.

Now open for registration to contractors who want to sit in the audience, the event will see Tory MP Liz Truss, Labour MP Bill Esterson and Lib Dem MP Ed Davey quizzed about what they will do to support PSCs and the freelance sector in general.

The Brexit Party’s Benyamin Habib and the Green Party’s Amelia Womack will also be pitching to freelancers and contractors at the event, scheduled for an 1800 start at the ICAEW Chartered Accountants’ Hall, Moorgate Place, London EC2R 6EA.

'Bold but very welcome'

For now though, the Lib Dem pledge to review IR35 proposals is the contractor’s sector biggest haul of General Election 2019.

“This is a bold but very welcome statement of intent from the Liberal Democrats, that clearly recognise the importance of the independent workforce,” said IR35 advisory Qdos Contractor. 

“[And while] action speaks louder than words….a review of IR35 reform would certainly be a positive step in the right direction.”

'Contractors let down by the existing government'

The advisory’s CEO Seb Maley suggested that, problematically for the incumbent government, contractors have long memories.

“In recent years, the Conservative Party has introduced a number of short-sighted tax reforms, such as IR35 changes”, he said.

“With the general election only weeks away, this will be in contractors’ minds as they head to the polls. That the Lib Dems have shown [that they] at least understand the issues most important to contractors will likely win them the support of independent workers who feel let down by the existing government.”