When you are fighting in the race for Prime Minister like Liz Truss, you make many promises to all kinds of people, including a review on IR35.
Well, it is interesting that this has been coming out recently. Liz Truss is already thinking about the different groups she can appeal to. Speaking to The Sun this week she discussed IR35 and how she feels that the changes of April 2021 disadvantage the self-employed.
Surprise, surprise that she chooses to bash something brought about under her rival Rishi Sunak. Yet, she is not wrong. It is undoubtedly on the complaints list of contractors and businesses alike. It is also a topic constantly in the news these days so perhaps bringing down the reputation of HMRC.
Rishi Sunak and Liz Truss have been all over the UK calling for votes. It is interesting that Liz Truss has chosen to identify IR35 specifically given the perceived make-up of Tory membership she is appealing to. Yet this is a good thing for contractors who have been suffering under new changes.
From being forced to work with specific umbrella companies to being told all contractors are employees by certain firms, the changes have been far reaching. They are being interpreted in many different ways.
It seems strange that a policy like this is so woolly that it is businesses implement it in so many ways.
Whoever gets into power only needs to see how IR35 is operating on the ground. This comes hand in hand with waiting on a review of IR35 which one can only imagine will be damning. Really, whichever of them it is, should not stand by it.
Rishi Sunak's on IR35
Yes, Rishi Sunak was involved in implementing it but surely anyone can see it is not working as it was the original intention. Perhaps if there was a fully reliable tool to make IR35 decisions that businesses could stand by it would be different. Yet CEST is not that tool and there is no defence for any organisation that wrongly assesses IR35 in the eyes of HMRC.
It is easy to understand why some apply a broad brush to contractors as they are afraid. Yet all this does, every time, is mean contractors are losing out.
Many individuals within the government and the Conservative Party have said over time how important contractors are. They boost businesses and provide an essential service. Yet IR35 among issues such as Covid and Brexit have led to contractors swapping for permanent jobs.
Others have left the country or gone to find alternative sources of work. In an area such as IT, there is a shortage of contractors available to do work at the moment. With the pressures of issues like IR35, is it any wonder that contractors have been put off.
Whoever wins the leadership contest, let us hope that they take the time to review IR35. The more people earning, the more for the HMRC coffers whether inside or outside IR35. If it is Liz Truss, let us hope she lives up to the pledges she made in her interview.
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