In IR35

The Minister for Employment, Alok Sharm MP, came under fire during a panel discussion at the Conservative Party Conference this week for the Government’s failure to do enough to support freelancing, contracting and other self-employed people.

Opening the discussion entitled “Is the Conservative Party still standing up for the self-employed?”, which was organised by the Institute for Economic Affairs and IPSE , the Association of Independent Professionals and the Self Employed, Mr Sharma defended the Government’s record by emphasising its successful efforts to reduce corporation tax for businesses, which had helped the UK become one of the best places in the world to start a new enterprise.

A former businessman himself, he acknowledged that a “culture change” was urgently necessary to tackle the scourge of late payments for small enterprises. In fact, elsewhere at the Conference, Business Secretary Greg Clark MP announced new measures to clamp down on this issue. These measures included appointing a non-executive director in large businesses to oversee prompt payment, trade associations highlighting best and worst practices, and promoting efficiency-maximising new tech such as the latest accounting software.

However, other panellists were more sceptical about the Government’s commitments to smaller enterprises, through which many of the country’s freelancing and contracting professionals operate. Lee Rowley MP expressed concern about a “worrying disconnect between Conservatives and business”, while the erstwhile winner of The Apprentice, former IT contractor and business owner Michelle Dewberry drew concerned attention to “an anti-business narrative” that had emerged within the party.

Simon McVicker, Policy Director at IPSE, emphasised the rising unease among freelancing and contracting professionals who were constantly anticipating “the next tax grab”. Highlighting the “calamitous and outrageous IR35 changes”, he urged the Conservatives to return to their roots and strongly back the 4.8 million self-employed people in the UK.

On the issue of the gig economy, Ms Dewberry insisted that this was a “lazy” term that conflated wildly different types of work, from unskilled, precariously-engaged couriers to high-end contracting professionals. Mr Rowley, meanwhile, warned the Government to “tread very carefully” around this work to avoid over-regulating it, as many young people, in particular, wanted greater flexibility in their working lives which the gig economy was helping to provide.

Returning to the vexing question of IR35 reforms, Ms Dewberry recalled her experience of the legislation during her years as a contracting IT professional as “the bane of my life”. Mr Rowley called for a restructuring of the wider tax system, an overhaul that echoes repeated calls from IPSE, which also believes that a statutory definition of self-employment would help bring clarity in place of the chaos and confusion that IR35 has visited upon the public sector.

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