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New Prime Minister needs to reform more than IR35 to bolster the UK’s economy
by The Editor at 18:39 06/09/22 (News on IR35)
Before new Prime Minister, Liz Truss, has had time to unpack the removal van at No 10, the representative groups and industry interests are lining up to push their agenda up the priority list.
The freelancer and contractor sector are no exception and they are hoping that some of the half promises and veiled campaign commitments materialise into something positive.

IPSE - Welcome
Freelancer and self-employment group, IPSE, welcomed the election of Liz Truss as Prime Minister, while reminding her of her pledge to launch a review into IR35. (See: Tory hopeful promises IR35 review if she becomes next PM - Shout99, Aug 22)

Andy Chamberlain from IPSE said: “IPSE looks forward to working with the new Prime Minister and her cabinet. The country faces a number of problems, and we hope that she outlines her plans to tackle the cost-of-living crisis, as well as the many issues facing thousands of freelancers and small businesses such as IR35, employment status, and Managed Service Company legislation.

“We also look forward to working with Truss on the promised review of the dreaded off-payroll working rules: IR35. These rules are destroying businesses and holding back the economy - and they need to change now.

“During the leadership race Truss talked about ‘tackling orthodox Treasury thinking’. If this review is to deliver meaningful change – which previous reviews haven’t – she will need to do exactly that: challenge the thinking that has led to this wretched legislation being enacted. If she makes real progress on this issue, she will achieve something that the previous three Conservative Prime Ministers couldn’t, enabling one of the most dynamic and innovative parts of the UK economy to thrive.”

Knigsbridge - 'back of queue'
Kingsbridge, specialist contractor insurance, speculated if she would follow through on her promise – made just a week ago – that she will order a review into IR35 rules.

Her comments piqued the interest of those involved with the legislation, as it marked the first time - in a long time - a Minister has acknowledged and empathised with the gap between tax status and employment rights. It gave some hope that – this time – a review might be more than just lip service. But Kingsbridge remained a little cyncial bout how high up the list f priorities a review might be.

Andy Vessey from Kingsbridge said: “The new Prime Minister has bigger issues to tackle, so I doubt that an IR35 review will be a priority and will get pushed to the back of the queue, if indeed it happens at all. While a review would be welcomed, I am not expecting a radical outcome in the near or distant future given that, during its 22 year history, little has been achieved in making IR35 simpler, fairer and able to provide certainty. We would urge our new Prime Minister to take action before the next General Election, or even pledge it as part of the Conservative Party’s next
election manifesto.”

Ryan Dawson, Kingsbridge IR35 Programme Manager also said: “Those involved with IR35 such as contractors, recruiters, hirers and industry experts will be pleased and quietly optimistic that Liz Truss is the new Prime Minister. As well as the review into IR35, her pledges included promises of tax cuts, and a  ‘business revolution’, giving hope that the self-employed workforce will finally see beneficial and positive action to provide clarity and security for future engagements.

“While an IR35 review along with radical action has been called for by businesses like Kingsbridge, my concern is IR35’s priority. The new PM enters Number 10 at a one of the most unstable positions in recent memory and will likely have many other important issues to address. But we need to see action, because businesses are besieged with IR35 challenges.”

APSCo - priorities
Agency group, APSCo, has highlighted the key priorities that need to be top of the new Prime Minister’s agenda, citing three crucial policy areas that Truss needs to focus on to support the UK’s economy to balance the impact of the pandemic, Brexit and the roll out of Off-Payroll:

  • Introduce the Employment Bill: Alongside Truss’s plans to review off-payroll legislation, APSCo says the introduction of the Employment Bill is urgently needed to help bring regulation of the recruitment market and umbrella companies in line with 21st century needs. This includes greater support for self-employed and independent contractors as well as clear definitions of the flexible workforce to prevent disguised remuneration.
  • Create a truly Global Britain: As the Government negotiates global trade deals, APSCo has recommended that these discussions focus on skills, the workforce and the mutual recognition of services and professional qualifications as well as tariffs and goods. The simplification of the process by which self-employed contractors obtain visas is also needed in a skill short economy.
  • Tackle Skills Shortages: APSCo’s research shows vacancy levels across all sectors are currently exceeding 2019 levels, suggesting jobs are remaining unfilled. Flexible and pragmatic training courses that are accessible to people across the entire workforce and a reform of the Apprenticeship Levy are a few of the steps APSCo has identified as necessary. The trade association has also called for the development of a national strategy, recognising urban hubs and regions with existing strengths in particular skills and industries.

Tania Bowers from APSCo said: “The country has experienced change on a huge scale in the last few years as a combination of Brexit, IR35 and the pandemic changed the world of work as we knew it, with the impact of continued global economic uncertainty and rising inflation adding to this difficult climate. The Tory leadership challenge only exacerbated these issues and we hope that this announcement will provide some much-needed stability.

“With the new Prime Minister now in place, we believe it is crucial that the employment and skills agenda is moved back up the list of priorities. The UK economy is facing a wealth of struggles from the cost-of-living crisis to concerning skills shortages and staff strikes across a range of sectors. A huge number of these challenges can be alleviated to some extent by a stronger and more dynamic labour market – an ideal that APSCo and its members are well-placed to help achieve.

“We welcomed the reports that Ms Truss intends to review IR35 legislation – a move which we feel is needed in light of challenges to the temporary recruitment market – but this needs to be supplemented with more definitive actions to create a future-fit dynamic labour market.

“At APSCo Global we want to work with policymakers to ensure we have a truly sustainable, global and flexible workforce fit for the future. We are calling on the Government to introduce an Employment Bill which will better reflect modern day working post-pandemic than current legislation, more suitable high-skilled visas that can allow the UK labour market to remain agile and alive to specific sector labour shortages. Flexible and pragmatic training initiatives designed to maximise businesses' access to talent across the workforce is also essential. In acting on these policy items, the UK will continue to be a world leader in new and existing markets.”

Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.

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