Tories pledge review of Off-Payroll rules

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IR35 tax review concept shown by Under review rubber stamp

As the major parties scramble for contractors’ votes, the Conservative Party has bowed to political pressure with chancellor of the exchequer Sajid Javid committing to a review of “the proposed changes to IR35” last Saturday.

The Liberal Democrats, the SNP and the Green Party had previously made similar commitments to review the reforms to IR35, known as the Off-Payroll rules, in their respective manifestos.

The Off-Payroll rules are due to be extended to the private sector in April 2020.

Labour did not mention IR35 in their manifesto, then made a surprise announcement at a hustings of freelance trade body the Association of Independent Professionals and the Self-Employed (IPSE) last Monday, where Labour MP Bill Esterton announced that Labour would conduct a “fundamental review” of the policy if elected, suggesting that such a review could even extend to the already implemented changes in the public sector.

This mounted pressure on the Conservatives, who traditionally like to position themselves as the party of small business, to follow suit.  The party had not committed to any review of Off-Payroll in their manifesto either.

Last Wednesday justice minister Chris Philp said on LBC Radio that the Tories would not be following Labour’s lead, suggesting that Mr Javid’s announcement on Radio 4’s Money Box the following Saturday represented a recent change in policy.

Mr Javid said:

“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.”

The chancellor also said that the Conservatives would look into improving access to mortgages and pensions for the self-employed.

Seb Maley, chief executive officer at IR35 specialist insurance firm Qdos, said: “With the general election nearly upon us, that the chancellor has pledged to review IR35 reform will be welcomed by contractors, who have understandably lost trust in this government.

“While a review of IR35 changes is certainly a sign of progress, reform is still set to be enforced in April 2020. As a result, contractors, recruitment agencies and private sector firms must work off the basis that it will be introduced until told otherwise.

“Given the Liberal Democrats have been praised by contractors for promising a review already, you are left to wonder if this is why the Chancellor has now decided to discuss the legislation.  IR35 was, as you might have noticed, absent from the Conservative Party manifesto.

“Nonetheless, a potential review into IR35 reform shows the government is listening at long last.  However, any review must be genuine and not lip service simply to win the votes of independent workers, who could be crucial in the outcome of the general election.”

3rd December 2019.