What the political parties are saying in relation to IR35 reforms

02 December 2019

In less than a fortnight, we will be voting to elect a new government and each political party is working tirelessly to attempt to secure votes, releasing manifestos and lobbying to win support up and down the country.

A big area of discussion relates to the upcoming IR35 / off-payroll working reforms proposed for April 2020. The Liberal Democrats addressed this in their manifesto, by stating that they would:

“End retrospective tax changes like the loan charge brought in by the Conservatives, so that individuals and firms are treated fairly, and review recent proposals to change the IR35 rules.”

The Scottish National Party (SNP) also pledged to assess the new legislation in their manifesto, promising that there would be:

“A review of the tax rules around intermediaries – known as the IR35 tax rule - and problems with implementation of the Loan Charge.”

The Labour party manifesto made no explicit reference to IR35 but Labour’s shadow small business minister, Bill Esterson initially advised that the party would abolish the extension to the reforms should they be elected. He has since retracted this statement but confirmed that there would be a review of the current plans to roll out IR35 legislation to the private sector.

The Chancellor of the Exchequer, Sajid Javid has confirmed that the Conservative party will review IR35 should they be re-elected. He stated:

“I want to make sure that the proposed changes are right to take forward.

 We’ve already said that we’re on the side of self-employed people. We will be having a review and I think it makes sense to include IR35 in that review.”

IR35 was initially introduced back in 2000 and is an anti-tax avoidance rule that aims to bring taxes for contractors and freelancers in line with that of employees should they not fit HMRC’s definition of being self-employed. IR35 reforms were implemented in the public sector back in April 2017 and the proposal was that it would be extended to the private sector from April 2020. Companies that are classed as ‘small’ in the private sector are not subject to the new rules.

CIPP comment

The CIPP Policy team sit on the IR35 forum and value hearing feedback and views from our members. Please don’t hesitate to contact us at Policy@cipp.org.uk so that your opinions can be heard.

 Payroll professionals should still prepare for the upcoming reforms to IR35 in April 2020. The CIPP is running both a webinar and a training course to help individuals on the subject. The webinar can be accessed here and to apply for the half-day training course,  please click here.

 


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