Which political party has the best interests of the self-employed at heart?

Following the launch of manifestos, the picture is mixed…

With the general election drawing closer, all political parties are busy campaigning and trying to win over voters ahead of 4th July. 

A major part of that charm offensive is the publication of party manifestos, which will form the basis of an incoming government’s mandate.

Having faced key challenges in recent years, many self-employed workers will be looking for the politicians who best represent their interests.

These 4.25m self-employed represent about 9% of the voting public, and at the national level, they have the potential to play a significant role in deciding who should next lead the country.

Key industry players such as IPSE and Dave Chaplin have already outlined what they expect the next government to deliver – from reviewing the off-payroll reforms to introducing umbrella regulation.

Below, we explore the key promises that each of the major political parties has made to the self-employed so far.

 

What is each party promising?

 

The Conservative Party

Looking to win over the self-employed after a series of tax hikes and freezes in recent years, the Conservative Party has pledged to:

 

• Scrap the main rate of National Insurance for the self-employed.

• Cap Corporation Tax at its current rate (25%) until 2029.

• Raise an additional £6bn through stricter measures on tax avoidance and non-compliance.

 

However, Crawford Temple – CEO of Professional Passport – was dismissive of the party’s attempts to woo the self-employed, labelling its plans to address tax avoidance as a “token” measure. 

“The Tories have had 14 years to stamp out tax avoidance, and yet unscrupulous operators are still exploiting loopholes, skirting regulations and thriving”, Temple said.

 

The Labour Party

In its manifesto, the Labour Party has committed to the following:

 

• Capping Corporation Tax at 25% for the duration of the next parliament.
• Action against late payments.
• The establishment of a Single Enforcement Body to coordinate enforcement and protect worker’s rights 

 

Responding to the launch of the manifesto, Policy Chair for the Federation of Small Businesses (FSB), Tina McKenzie, said it contained “welcome proposals” on a number of “crucial policy issues”.

These included the pledges to reform business rates and tackle late payments – signs that Labour “recognises the crucial importance of the UK’s small firms and the self-employed”, McKenzie said.

However, McKenzie also noted that the Labour manifesto left some questions unanswered. As a result, many self-employed “will want to hear more reassurance from the party” on the “huge taxes small firms already pay at every stage of running their businesses”.

 

Liberal Democrats

In its manifesto, the Liberal Democratic Party has committed to:

 

• Reviewing the off-payroll rules.
• Ending the Loan Charge, freeing an estimated 40,000 freelancers from retrospective tax bills.
• Introducing a new ‘dependent contractor’ employment status, and reviewing the tax status for the self-employed and those who would fall into the new classification

 

Dave Chaplin – CEO of IR35 Shield – said the manifesto was a sign that the party “understood the importance of the flexible workforce”, and welcomed “the commitment to a review of the off-payroll working reforms”.

 

Reform UK

Launched this week, the Reform UK manifesto offers several policies designed to appeal to the self-employed:

 

• Abolishing what party leader, Nigel Farage, described as “the crazy IR35 rules” within 100 days if elected. 
• Cutting the main rate of Corporation Tax from 25% to 20%, lifting the minimum profits threshold – both within the first 100 days – and reducing the main rate to 15% by 2029.
• Increasing the VAT registration threshold by 33%, from £90,000 to £120,000. 

 

All three measures will be of particular relevance to contractors and freelancers. IPSE has previously highlighted the importance of getting the VAT registration threshold right, to “alleviate the disincentives” caused by the current regime. 

 

Incomplete offerings across the board 

While the policies proposed to date suggest that politicians are aware of the significance of winning over the self-employed, it remains to be seen as to which – if any – party wins the support of the independent workforce come 4th July.