Reform UK's Richard Tice has echoed party leader Nigel Farage's strong dislike of IR35.
Following a speech by Mr Farage in which he called IR35 both "stifling" and "ridiculous," Mr Tice confirmed to ContractorUK that it meant a Reform government would axe IR35 "as part of plans to simplify rules for the self-employed."
'A Reform government would scrap IR35'
Reform's deputy leader, Mr Tice yesterday told ContractorUK: "IR35 has created significant challenges for many small businesses, freelancers, and self-employed contractors, leading to concerns about fairness and clarity in the tax system.
"A Reform Government would scrap IR35 as part of plans to simplify rules for the self-employed and support business growth."
It was Mr Farage who was first to attack IR35 last week.
The former UKIP leader said the UK's "completely forgotten about" company directors "feel unwanted," partly because they are "embattled by IR35".
'IR35 designed by the Treasury'
The Intermediaries legislation, or just "IR35" as Mr Farage called it in his minute-long attack on the rule, was "designed by the Treasury and weak Conservative chancellors", he said.
Mr Farage launched his attack on IR35 during a speech at the Square Mile's Bankers Hall.
His mentioning of the Conservatives is significant as it makes clear — for the first time — that Reform UK appears to be taking aim at the Off-Payroll Working (OPW) rules.
'Weak Conservative chancellors'
The OPW rules were introduced under the Tories, first in April 2017 in the public sector, and then on April 6th 2021, in the private sector.
IR35 was introduced by Labour in 2000.
The inference, then, from Mr Farage's speech ("weak Conservative chancellors") is that it's the OPW rules which are in his party's crosshairs.
Combined with Reform UK's 2024 election manifesto commitment, Mr Farage's attack on IR35 indicates that the party which would win a general election if it were held tomorrow wants the OPW rules repealed.
'Abolish IR35 rules to help sole traders'
A repeal of the OPW rules was announced at the mini-budget 2022, by the then-chancellor Kwasi Kwarteng.
However, Mr Kwarteng's OPW repeal (which would have had the effect of leaving only IR35 of 2000 in force), was cancelled by his replacement, Jeremy Hunt, 24 days later, on October 17th 2002.
In July 2024, in its election manifesto, "Our Contract With You," Reform UK pledged to "abolish IR35 rules to help sole traders."
At the time, ContractorUK asked for clarification, including whether by "sole traders" (who are exempt from IR35) Reform UK meant 'sole-person' Personal Service Companies.
Yesterday, asked by ContractorUK whether a Nigel Farage-led government would repeal IR35 for "one-person limited companies," Mr Tice confirmed that to be the party's policy.
'Company directors embattled by IR35'
In his own comments attacking IR35, Mr Farage said: "And they [company directors] are embattled by IR35, designed by the Treasury and weak Conservative chancellors who assume that everyone out there, who isn't working for a large firm, is some kind of crook.
"Well, I'm sorry, but the IR35 regulations are ridiculous.
"They are stifling innovation — they even drive some in their fifties, just to throw their hands up and go into early retirement."
Nigel Farage's comments appear to make him the first leader of a major UK political party to use a high-profile speech to attack IR35.
And Mr Tice's comments to ContractorUK appear to make him the first deputy leader of a major UK political party since Labour came to power to pledge to remove IR35 (in at least one of its forms) from the statute book.
'Farage is right to point out IR35's disproportionate impact'
In the contractor sector, the majority of advisers to Personal Service Companies (PSCs) are signalling that Reform's two leaders attacking IR35 is justified.
"He [Farage] is right to point out the disproportionate impact these rules have had on experienced professionals," Fred Hicks, policy director at IPSE began to ContractorUK.
"Our own surveys of contractors before the IR35 reforms [hit] gave us advance warning that many would take it as their cue to retire early. And that's exactly what happened."
'Reform UK has a firm stance on IR35'
Also in a statement to ContractorUK yesterday, Ryan Dawson, IR35 project manager at Kingsbridge said: "We've seen Reform UK has a firm stance on IR35 at the last election, and that appears to continue.
"Nigel Farage has really echoed what most of us already think.
"Many of our own partners and…[us as IR35 insurers] believe [the] OPW [rules] should be looked at closely, with a view to simplifying or scrapping them altogether.
"We know the burden that these off-payroll working rules cause businesses and contractors today. And we know the adverse impact…[IR35 reform] had since its private sector introduction in 2021."
'IR35 plays a part in preventing contractors from being able to retire'
Meanwhile, Roger Sinclair, legal consultant at Egos, asked ContractorUK: "Isn't the point that by disincentivising innovative talent, IR35 actually plays a part in preventing contractors from being able to afford to retire in their sixties, let alone in their fifties?
"While [Farage] is right in saying that IR35 is a bad thing….[a single speech] is hardly likely to generate the kind of electoral support that might be needed to consign IR35 [reform] to history."
'Most limited company directors pay staff before they even consider paying themselves'
Mr Farage's anti-IR35 comments last night drew sympathy not just from advisers, but from those directly affected by the frameworks.
"Consecutive governments have painted all small to medium-sized enterprises as money-grabbing, tax-avoiding rich people, at every opportunity," began Nadine Drelaud, an IT contractor.
"This narrative is paraded in front of voters, 65 million of whom are not business owners, and do not understand, even if they are employed by one of the 5.6 million SMEs, that revenue does not equal profit and that most limited company directors pay staff before they even consider paying themselves.
"It's this false narrative that 'all business people are crooks' that both created IR35 and solidifies its implementation."
'Reform UK is now not the only party putting IR35 under scrutiny'
IPSE's Fred Hicks observes that it's not only Reform UK taking issue with HMRC's 'disguised employment' legislation.
"It's important to note that Reform are not the only party putting IR35 under scrutiny," he says.
"The Liberal Democrats and Conservative opposition have recently voiced criticism too, so a consensus is forming against IR35 on the opposition benches."
'Is it better to have the devil you know on IR35, rather than the devil you don't?'
But it is the government frontbench that PSC contractors will really want to hear IR35 criticisms emanating from, hinted Egos's Mr Sinclair.
Kingsbridge's Ryan Dawson echoed: "Aside from the [2024 election manifesto] error, because IR35 doesn't directly impact sole traders, Reform UK's new attack on IR35 is interesting.
"I think some contractors might say that, with IR35, it's better to have the devil you know rather than the one you don't.
"Even more likely, contractors will observe that it's much easier to talk about the things you would do in government when you're in opposition. It's far harder once you're actually in power and have to deliver those promises — just as Labour is finding out."
'IR35 isn't fit for purpose'
Ken Davis is a Linux contractor who says the OPW rules are significantly depressing contractor pay rates.
Shown the IR35-related part of Nigel Farage's speech, Mr Davis told ContractorUK:
"To be honest, it's easy to bash IR35 because it's not fit for purpose.
"Hopefully, when Reform UK gets into power, the party will resolve it rather than bash it. But the problem is always going to be that IR35 makes a ton of tax for HMRC, and whoever is in power needs that revenue."
