Shadow Corporate Governance Minister Jonathan Djanogly has confirmed to ContractorCalculator that a future Conservative Government would review IR35 with the aim of amending or replacing it. He also confirms that the Tories have Europe’s Agency Workers Directive and Labour’s income shifting proposals in their sights.
In the exclusive interview with ContractorCalculator, Djanogly says: “We fully understand that self-employed people have concerns that they are being pulled into the employment sphere by IR35, and that existing legislation must be reviewed.”
The MP for Huntingdon continues: “We have to ask whether we should simply scrap IR35 and return to pre-2000 conditions, or whether we should amend the legislation. We are aware that there will be unintended consequences if IR35 is simply scrapped, with nothing to replace it.”
According to ContractorCalculator editor-in-chief and CEO Dave Chaplin, this is a marked contrast from the current government’s position. “Labour has consistently refused to consider amending the unfair IR35 tax legislation,” says Chaplin. “Now that IR35 has been with us for ten years, it is clear that this legislation cannot simply be abolished with no replacement. So the Conservative Party’s open and consultative approach is to be welcomed.”
Djanogly, who has practical small business experience from running his own law firm, says that government’s relationship with business must change. “The regulatory atmosphere for business has become totally over the top,” he says. “And it’s not just over-regulation, but the very process by which government consults with business.”
He insists that a new Conservative government would continue its series of reviews and consider not just IR35, but other regulatory burdens and legislation impacting on contractors. Such reviews, says Djanogly, would include the income shifting proposals that threaten husband and wife companies, and the Agency Workers Directive, which could severely damage contractor and recruiter livelihoods.
Commenting on the ongoing Department of Business Innovation and Skills (BIS) consultation on the Agency Workers Directive, Djanogly wants to see the process slowed and the implementation of the directive delayed. “This is for two reasons. Firstly, with the current economic climate, it is the wrong time to introduce further regulation that increases costs for business.
“And secondly,” he continues, “we should wait to see how other countries implement the directive first. The UK will be the country most affected by the directive, so why should we be the first to implement the legislation?” Djanogly says that if the Agency Workers Directive is delayed, a future Conservative government would start the implementation process from scratch.
Chaplin joins Djanogly in urging contractors and freelancers to respond to the BIS consultation calling for a delay and to contact their MPs to put pressure on the government to slow the process and undertake a thorough review of the AWD’s consequences.
“Unless the brakes are put on the implementation of the Agency Workers Directive,” concludes Chaplin, “we will end up with another botched and badly thought-through piece of legislation. If the current BIS proposals are enacted, we would end up losing and not securing jobs, which was certainly not the AWD’s intention when it was agreed by Europe.”
END OF PRESS RELEASE
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ContractorCalculator is a leading independent website for the UK contracting industry – most of whom are highly skilled knowledge workers in information technology, telecoms, engineering, electronics, and construction.
There are 1.4 million such workers in the UK today who prefer to run their own businesses and work under contract rather than become employees of specific companies. Their contribution to the economy is crucial to keeping UK businesses competitive.
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