IR35 to be reviewed
In recent news, Liz Truss has pledged to review IR35 as one of her first acts as Prime Minister. She argues that the UK tax system should take into account the fact that self-employed and contracted professionals are not entitled to paid time off or other job benefits.
What has Liz Truss said about IR35?
In an interview with The Sun on Sunday, Truss said: "The changes that have been made to IR35 are all about trying to treat the self-employed the same as a big business".
“But the fact is, if you’re self-employed, you don’t get the same benefits as being in a big company. You don’t get paid holidays, you didn’t get those benefits. So the tax system should reflect that more.”
IR35 was created to ensure that self-employed individuals who are actually "disguised" workers pay the appropriate tax by falling "inside" IR35.
However, the rules are often criticised as being far too complex. Truss also mentioned that HMRC hasn’t looked at IR35 rules alongside employment rights.
Will the review solve anything?
Truss's remarks have been welcomed by self-employed and contracting organisations, although they are sceptical of the promise of yet another review
Despite promising an IR35 review in their 2019 manifesto, the Conservatives focused more on private sector changes in 2021.
Should IR35 be scrapped altogether?
In a recent interview director of policy at The Association of Independent Professionals and the Self-Employed (IPSE) Andy Chamberlain said: "This review must lead to radical and tangible change. Nothing should be off the table, including scrapping this dreadful legislation altogether."
As well as this, a recent study in 2021 found that over 90 percent of contractors thought the then-upcoming changes should be delayed further – with half agreeing they should be scrapped completely.
If Liz Truss fulfills her promise to fix IR35 this could be great news for those who are self-employed and contractors alike, nevertheless with so many reviews and recommendations out there but little meaningful action so far, how confident are you in Liz Truss’s ability to change IR35?