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Lib Dems would review IR35 and end Loan Charge 

Swinson pledges to review IR35 reform and scrap Loan Charge

The Liberal Democrats have revealed in their Manifesto that they plan to review IR35 reform and end the devastating Loan Charge, should they come into power in December. 

As part of leader Jo Swinson’s ‘Plan for Britain’s Future’, the Party announced it would “end retrospective tax changes like the Loan Charge brought in by the Conservatives so that individuals and firms are treated fairly.” The Manifesto also included a promise to “review recent proposals to change the IR35 rules” and said it would “take tough action against corporate tax evasion and avoidance” made by international tech giants and large monopolies. 

This pro-contractor Manifesto has been music to the ears of many independent workers and IR35 experts, who have regularly outlined the unfairness of recent and incoming changes to the IR35 legislation. On 6th April 2020, IR35 reform will be enforced in the private sector. It will see contractors lose the right to set their own tax status, with the medium and large firms they work with taking on this responsibility. A similar version of the rules has been in place in the public sector since 2017. 

Meanwhile, the Loan Charge – an issue which the Prime Minister recently ordered a “thorough review” of – has left tens of thousands of contractors with monumental tax bills and led to several confirmed suicides.

“A welcome statement of intent”

This long-overdue support of contractors from one of the major political parties has been applauded by industry commentators, with Qdos Contractor CEO, Seb Maley describing it as a “bold but very welcome statement of intent,” before praising the Liberal Democrats “that clearly recognise the importance of the independent workforce.”

Mr Maley was, however, quick to add that “actions speak louder than words.” He also made the important point that “it remains to be seen whether they (the Liberal Democrats) will form a part of the next Government.”

IR35 review is “just what is needed”

With the introduction of IR35 reform now just months away, Contractor Calculator CEO, Dave Chaplin also welcomed the Liberal Democrats’ acknowledgement of the issues impacting contractors most. He said “a considered review of IR35 and these devastating proposals is just what is needed,” then criticised the sheer complexity of the employment status test which hasn’t “worked for 20 years under the intermediaries legislation and hasn’t worked under the new rules either.”

Conservatives face further criticism 

In addition to being well-received by contractors, the Liberal Democrat Manifesto also shined an unfavourable light on the existing Government’s treatment of the independent workforce in recent years.

FCSA’s Julia Kermode was one of several experts who condemned the Conservative Party for introducing initial IR35 reform two years ago before committing to roll-out changes in the private sector next year: “In the last few years we have seen many changes to tax legislation and IR35 reform is one change that has not been properly targeted, not been proportional and not been fair for the vast majority of genuinely self-employed workers or the businesses that have engaged them. However, this current Government is yet to acknowledge that.”

Will Swinson’s pro-contractor stance pay off?

Incidentally, both the IR35 legislation and the Loan Charge were ignored in the Labour Party’s and the Conservative Party’s respective Manifestos – a development which could mean the vote of the UK’s contractor workforce is up for grabs, explained Qdos CEO, Maley.

“That the Liberal Democrats have shown they at least understand the issues most important to contractors will likely win them the support of independent workers who feel let down by the existing Government.”

You can read the entire Liberal Democrat Manifesto here.

By Contractor Weekly

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13 thoughts on “Lib Dems would review IR35 and end Loan Charge ”

  1. Nigel

    I attended on the evening of 25th via live stream The 2019 General Election Small Business Debate hosted by the Institute of Chartered Accountants, and sponsored among others by IPSE.

    Liz Truss from the Conservatives promised nothing. She batted off most questions with answers of a government review. It was typical question dodging with nothing of value to add, and an extremely poor performance. They have no plans to do away with IR35, and only seem intent on strengthening their position, not loosening it. She also smiled most of the way through, showing complete disdain for the trouble they are heaping on the self employed work force.

    On the other hand, Ed Davey from the Lib Dems was excellent in praising the contractor workforce and saying that IR35 was not fit for purpose. The exit poll of the event had the Lib Dems on 54% (iirc).

    Only a crazy self employed person will vote anything but LibDem this election. Regardless of your position on Brexit, preventing a 30% pay cut wins out every time.

    • Peter Clareburt

      Yes but a vote for the Lib Dems is a bit like a vote to win lotto and then I wouldn’t care about IR35. All these point statements are of little value unless they are from the majority party in a government and high on their agenda. I am sure even if the Lib Dems are the king makers, this would not be a policy they would be holding out for in making a coalition agreement.

      The only solution is to either get this into a manifesto of the two major parties (too late now) or to continue lobbying to make them also understand the need for a flexible workforce.

  2. Like!! Great article post.Really thank you! Really Cool.

  3. David

    At last a party listening to voices of independent workers. They’ll be getting my vote

  4. Graham

    Has everyone gone nuts here?

    Just because the Lib Dems have said they will review IR35 does not mean it will be in favour of contractors. Indeed the local Lib Dems I have spoken to believe the LD solution is to remove IR35 by effectively putting ALL PSCs INSIDE IR35. The one saving grace would be that expenses were allowable again.

    Vote LD if you want to finally kill of genuine self-employment.

    • Steve

      I would say with the conseratives, Contracting is already dead.. I’m selling my assets (one of which is an industrial building) and closing down my limited company. Will retire if it looks to expensive t ocontinue under payment company.
      Labour are hopeless and Corbyn lives in 1970.. Think he’s trying for a place in Life on Mars, next series..
      I personally will give the Lib Dems a vote. Wasted one the other two.
      I’m currently working in Holland via my UK limited company.. Come Brexit, you won’t belive the hassle we will have.. I work with an Albainian, work permits, non-EU discrimination.. This will be us in a early next year…

  5. Ying Tong

    Contractors are not all daft of course. The Libbies’ manifesto “promise” is to review recent proposals to review recent proposals change the IR35 rules. We’re accustomed to placing a net value of nil on vague statements made by slippery politicos of every stamp. Plenty of room for Ms Swinson to slither out from under this one in the unlikely event of her party playing some part in the next government. In any event IR35 is a civil service policy to ensure the natives do not become uppity and the first division boys and girls would soon bring her to heel.

    Which are the recent proposals? Public sector changes came into effect in April 2017 and the Government announced in the 2018 budget that they would be rolled out to the private sector. Is that recent? Ms Swinson & co might might well decide, on reflection, that the proposals look just fine. They would point out they have always been clear that only recent proposals were to be reviewed and it was absurd to think that legislation which has been in place since 2017 would or could be reviewed. If there is nowhere else to go the Libbies could just run the tuition fees strategy again. Of the IR35 reform review promised in the 2019 manifesto, “Yeah, well, whatever…”

  6. GoodName41

    This probably *really* means that the Lib Dems will triple personal and corporation tax for contractors and apply it retrospectively over the past 15 years forcing many people to become homeless or commit suicide.

  7. KGD

    Yeah, you’d have to be mad to vote Lib Dems based on this alone. IR35 has been around for nearly 2 decades, they’ve had plenty of time to come to a position on it. A promise to “review” it actually means they won’t do anything, but want you to think that they will in order to grab a few extra votes. Don’t be fooled, they’re all a shower!

    You might as well vote based on your Brexit position as that’s about the only thing in their manifesto they’re likely to stick to. Kind of rules out Labour though since they don’t have a coherent position on Brexit! 😉

  8. maxhead

    The solution is so simple

    Tax expenditure and NOT INCOME

    There must be a massive lobby keeping income tax where it is… very likely the BEAN COUNTERS

    Nest of vipers

  9. Contractor No Vote

    There is no point in voting.

    I can not find a single party that represents me or mine.

    Every party wants to spend like crazy on things that THEY support and they want ME to pay for it.

    • maxhead

      Well said!

      They do not represent “we the people” that’s certain

      They are ego involved in thier position and forgotten the meaning of democracy

  10. maxhead

    Well said!

    They do not represent “we the people” that’s certain

    They are ego involved in thier position and forgotten the meaning of democracy

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