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How can Boris Johnson ‘unleash’ contractors in 2020?

After the General Election, Boris Johnson has an opportunity to win back the support of contractors in 2020, many of whom feel they have been let down in recent years. This is the view of the association for the self-employed, IPSE, that in the run-up to the election released its manifesto for the UK’s 5millon strong self-employed workforce, which is said to contribute £305bn to the economy every year.

In addition to calls to abolish incoming IR35 changes, the IPSE manifesto includes a number of other proposals for the Prime Minister to take into consideration as his Party aims to hit the ground running in 2020.

Create a modern tax system

The tax system is complex, outdated and penalises the self-employed, IPSE explains – no doubt a view also held by contractors and contractor accountants for that matter. With this in mind, the association has called for a full wide-ranging review of self-employed and small business taxation, which would “unleash the UK’s entrepreneurial spirit.”

From ending retrospective taxations such as the damaging Loan Charge, to delaying incoming IR35 changes for at least two years and freezing National Insurance Contributions (NIC) for the self-employed, IPSE makes the point that tax must evolve and accommodate independent workers better – a view that many contractor accountants also agree with for what it’s worth.

End late payment, at long last

According to the FSB, late payments result in the closure of more than 50,000 small businesses every year. It’s statistics like this that has compelled IPSE to argue that the late payment culture has to change in the UK. This starts by handing the Small Business Commissioner powers to fine and name and shame the companies that pay freelancers, contractors and small businesses late.

To end late payment once and for all, the association has also called on the Government to write the Prompt Payment Code into law, which it believes would ensure companies pay up within 30 days.

Help contractors prepare for life after work

Recent data published in the Guardian suggests that as many as one in three self-employed people are not saving into a pension. As the number of freelancers and contractors continues to grow in the UK, IPSE has urged the Government to prevent a self-employed savings crisis in its tracks by offering flexible pension products designed for independent workers.

As part of this recommendation, the IR35-lobbying body has said automatic enrolment simply doesn’t work for the self-employed. Therefore, the association is encouraging the Government to roll-out a ‘sidecar pension scheme’, which would give independent workers the ability to split their savings into a pension pot and an emergency fund for rainy days.

Extend contractors’ parental rights

A number of contractor organisations, such as Vantage and Partners, have often called for rights to be granted to contractors operating inside IR35. IPSE has explored this area further, outlining the importance of all freelancers and contractors being given equal opportunities to care for their children while building a business. This would be achieved by extending Shared Parental Leave (SPL) to the self-employed. The association has also said the Prime Minister should extend the rights disabled self-employed people are offered.

Make the UK the place to be a contractor

In recent years, questionable tax reforms, such as IR35 changes, and the Government’s general lack of support for freelancers and contractors have created a challenging environment for the self-employed.

IPSE has recognised this and is challenging Boris Johnson and his Cabinet to introduce positive policy changes that help independent workers thrive. Whether it’s delivering superfast broadband across the entire UK by 2025, incentivising the use of work hubs or offering tax breaks for training, the association wants the UK to be the best place to start and grow a business.

Of course, most contractors (and plenty of accountants for contractors) would argue that putting a stop to the roll-out of IR35 reform in April 2020 is a sure-fire way to repair the damaged relationship between independent professionals and the Government. That said, while an IR35 review has been promised recently, it seems unlikely that the PM will scrap changes before they are introduced.

However, as contractors in 2020, when looking ahead, there is at least one thing we can be sure of: if Boris Johnson is to win the hearts and minds of contractors, he must start listening to the likes of IPSE, along with independent workers themselves, who have never been more important to the UK economy.

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