Organisations representing the UK’s professional contracting community and the staffing industry have cautiously welcomed the Chancellor’s Spring Statement.
Andy Chamberlain, Deputy Director of Policy and External Affairs at the Association of Independent Professionals and the Self Employed (IPSE) observed that people who work for themselves as sole traders, via Umbrella Companies or through limited companies had “come to dread the Chancellor’s bi-annual visits to the Dispatch Box.”
But on this occasion, the Chancellor made no big announcements unjustly associating the self-employed with tax avoidance, or threatening to hike up Class 4 National Insurance. Particularly welcome was his omission of any mention of further destructive reforms to the “already disastrous” IR35 regulations.
Instead, two key consultations were promised which will help those who work for themselves. The first will address late payment, a stubborn problem for independent contracting professionals, while the second will address training. Chamberlain continues:
“We are delighted that the Government has at long last heard IPSE’s pleas to equalise the tax treatment of training for employees and the self-employed.”
Most commentators had expected the promise of a consultation on IR35 compliance in the private sector, which featured in November’s Red Book, to come in yesterday’s Statement. But there was no mention in either the government’s or HMRC webpages.
Chamberlain cautiously welcomed the omission, stating: “It seems that, for the time being at least, there will be no fraught discussions on whether the painful and costly public-sector reforms should be extended to the private sector. But it’s no great cause for celebration – that argument is still coming, just not yet.”
Tom Hadley, Director of Policy at the Recruitment and Employment Confederation (REC), shared similar sentiments. He welcomed the focus on education and skills and the absence of any mention of action on extending IR35 any further, especially as most REC members agree that the rules were implemented badly in the public sector and “the employment status for tax tool is still not up to scratch.”
Julia Kermode, CEO of Umbrella Company trade association the Freelancer and Contractor Services Association (FCSA) agreed that the omission of further IR35 action was welcome. She added that “we will continue to make our voice heard on behalf of the UK’s hard-working contractors and freelancers that a private sector roll-out will be hugely damaging for them and the UK economy.”
She went on to note claims of greater compliance in the public sector were unsubstantiated. Simply forcing huge numbers of contractors onto the payroll did not amount to compliance, as many will have overpaid tax and will therefore move to reclaim overpayments due course. The real figures, she added “will not emerge until after January 2019.”