In an interview with the Sun on Sunday, Conservative leadership candidate Liz Truss has pledged that she will review IR35 rules if she becomes the UK’s next Prime Minister. IR35 legislation, which was introduced for private sector businesses in April 2021, has had a significant impact on the UK’s freelance workforce.
Truss, the frontrunner in the Tory leadership race, said: “The changes that have been made to IR35 are all about trying to treat the self-employed the same as big business. But the fact is, if you’re self-employed, you don’t get the same benefits as being in a big company. You don’t get paid holidays, you didn’t get those benefits. So the tax system should reflect that more.”
Truss added that she wanted to lead a “small business and self-employed revolution” to help kickstart the UK’s economic growth amid the escalating cost-of-living crisis. She continued that there was “too much talk that there’s going to be a recession” and added: “I don’t believe that’s inevitable. We can unleash opportunity here in Britain.”
As well as reviewing IR35 rules, Truss has also promised tax cuts and has said that she would immediately reverse the recent hike to national insurance contributions introduced under her leadership rival, former Chancellor Rishi Sunak.
Discussing Truss’ comments, Qdos CEO Seb Maley said: “It’s widely accepted that the IR35 legislation and the way HMRC enforces it is fundamentally flawed. Liz Truss must make a review a priority if she becomes Prime Minister. But this mustn’t be lip service or a tactic to win the votes of contractors for whom IR35 remains a massive issue.”
“Any review of IR35 needs to be independent and far-reaching. HMRC’s very own IR35 status tool is unreliable and inaccurate, which is a major risk to compliance. While the legislation is forcing genuinely self-employed contractors into zero rights employment – a situation where they pay tax as employees but don’t receive any employment rights in exchange.”
However, Maley added that previous reviews into IR35 have been followed by little or no action and warned that contractors might take Truss’ pledge “with a pinch of salt”.
