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Will the new Small Business Minister be given any power to tackle IR35?

Very recently, Andrew Griffiths was appointed the Government’s new Small Business Minister, and the man set the task of building an environment in which every small company in the UK can finally prosper.

Given the UK’s small business landscape is made up of 5.7million companies with hugely different needs, to say the role is a challenge would be an understatement.

The self-employed make up around 2million of the UK’s 5.7million small businesses. Taking this into account, it is therefore vital for the new Minister to champion change in the way the Government specifically treats independent workers.

The growing influence and economic contribution (£119bn in 2016) makes a case for this even more so. There is a strong argument that the independent workforce should be a focal point in Mr Griffiths’ strategy – that is, if he is to have a realistic chance of making a difference in his new role.

The arguably short shelf-life and the merry-go-round of Ministers makes it important that the he wins round small business owners quickly, given the ill-feeling they currently have towards the current Government.

The biggest issue currently and arguably on the horizon for contractors is IR35. Recent reform and possible further changes this year have understandably left contractors concerned about being wrongly placed inside IR35 by their public sector clients, and in time, their private sector engagers too.

Mr Griffiths could show his commitment to contractors – who account for over a third of all UK small businesses – by acknowledging the clear issues which lie at the heart of the IR35 legislation.

An IR35 consultation might well have been promised for 2018, but the Government has not been clear on the shape this might take. A Minister who understands the importance of holding a fair review into the problems which continue to complicate IR35 could hold the key to progress.

Nobody is suggesting Mr Griffiths has the authority to reverse the Government’s widely predicted plans to introduce IR35 reform into the private sector, but he would gain respect and perhaps even the support of contractors if he acknowledged the obvious failings of IR35 and pledged to resolve as many as he could.

The new Minister might not have any real influence in shaping the future of IR35, but with a remit to help small businesses thrive, he must ensure contractors’ voices are heard loud and clear.

If the Government’s mind has been made up on further IR35 reform (which looks increasingly likely), contractors need a figure in Parliament doing their utmost to ensure new changes, in addition to already introduced reform is implemented smoothly and compliantly.

However, any chance of such a thing happening rests on Mr Griffiths being given a seat at the table by his Parliamentary peers. His appointment simply cannot be used to keep the unrest of the self-employed and small business owners’ frustration with the Government at bay.

It is a worry that other Ministers with roles focused on self-employment and small business have failed to push through a thorough IR35 review in the past. These include Margot James, the previous Small Business Minister, Paul Uppal, the Small Business Commissioner, and David Morris, who in 2014 took on the role of the Self-Employed Ambassador for a period of time.

Much of these Ministers’ time and energy has been spent tackling the UK’s late payment problem – a worthy cause, but one that arguably hasn’t been resolved either.

IR35 impacts every PSC contractor in the UK. Should private sector changes be announced in 2018, it will become an issue that each private sector business engaging independent workers will be forced to contend with.

Should the responsibility of determining IR35 status be passed on to private sector engagers (similar to in the public sector) contractors will rightly fear inaccurate IR35 assessments, which could lead to their working arrangement being placed inside this very complex legislation. And following an IR35 investigation, incorrect determinations could cost end engagers six figures in liability.

Given the cost of non-compliance is huge for each party in the supply chain, it’s clear that IR35 is a topic which deserves serious attention in Government.

Is Andrew Griffiths the man to ensure contractors’ concerns are finally heard by those making the decisions in Government? Time will soon tell, but the new Small Business Minister will no doubt soon realise (should he not already) that it is very often the smallest companies who contribute the most.

By Contractor Weekly

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