A new Liberal Democrat IT policy paper to be discussed at the party’s Autumn Conference in late September calls for the suspension of IR35. And since ContractorCalculator broke the news to the contracting community on 26th August, much of the coverage elsewhere implies there is still a debate to be had on IR35’s abolition.
There isn’t. And certainly not at this time.
But such is the hunger for ‘good news’ on IR35, that commentators appear to believe that the writers and promoters of the policy paper really have a chance of changing the IR35 landscape in the coming weeks.
They don’t.
Perhaps the Liberal Democrats behind this paper have entered a time warp that has rewound the world by at least six months. For, despite their own party being part of government, they seem to have missed the bit where Chancellor George Osborne made it abundantly clear in his 2011 Budget that IR35 will be with us for the foreseeable future.
ContractorCalculator deliberately broke this story in our weekly News In Brief roundup. It really doesn’t deserve more attention than we gave it, as the story is more of a curiosity than real news. But since then, a series of re-reports and overheated commentary have appeared elsewhere in the contracting media, lending unwarranted credence to this absurdly timed Liberal Democrat proposal.
Surely the authors of the paper and those in the contracting sector who are clinging to it like a lifeline must have noticed that not only has the Chancellor made his decision on IR35 clear, but that he has also set up the IR35 Forum to implement the “better administration” of IR35. And can they not see that it is even possible that contractors could benefit? After all, careful analysis shows that better administration might finally clearly exclude genuine contractors from IR35, leaving only genuine disguised employees in its clutches.
Advocating the abolition of IR35 in favour of an unknown alternative is a dangerous course of action, because any replacement is almost certainly going to be designed to extract even more tax from the flexible workforce than IR35 currently does.
Thankfully, the debate has moved on since the Office of Tax Simplification’s interim review of Small Business Taxation was published in March 2011. Or so we thought. The only conclusions that can be drawn from this group of Liberal Democrats attempting to abolish IR35 now are that:
- The people involved have simply not done effective research into the issues and history around IR35, and are genuinely mistaken in their belief that the IR35 abolition it is proposing will actually help contractors; or
- The call to suspend IR35 is quite simply shameless pre-conference season electioneering. It is designed to differentiate the Liberal Democrat Party from its coalition partners, the Conservative Party, by adopting pseudo labour-protection, left-leaning policies designed to win the hearts, and future votes, of the UK’s rapidly expanding flexible workforce. A workforce that may, in years to come, dominate the UK’s electorate.
Despite the LibDems step to the left, there’s no chance of a time warp enabling the IR35 abolition debate to be reopened now. Let’s hope that the IR35 element of the paper is quietly buried at the LibDems’ Autumn Conference and does not derail, or prove to be a distraction from, the work of the IR35 Forum to improve contractors’ certainty over their tax affairs.