Tories vow to replace tax rules which have ‘badly let down’ the self-employed
The Conservatives will replace a set of tax rules for self-employed people which have “badly” let them down, shadow chancellor Andrew Griffith has announced.
Mr Griffith made the announcement in his first speech since he was appointed as John Healey’s opposite number in the Conservative reshuffle at the end of August.
Rules designed to prevent tax avoidance by “disguising” workers as self-employed contractors, known as IR35, will be replaced by the Conservatives if they return to government, the shadow chancellor said.
Speaking at a college in north London, he said: “For the self-employed, many of whom will have started out in colleges such as this, there is this special torture of making tax digital. Making tax difficult, as it’s often known.
“Instead of getting on with the job, they’re forced to spend time and money being tracked and traced by HMRC, filling four extra reports a year before they’ve even started their tax return.
“Then there’s IR35, a regime which crushed the dreams of so many self-employed people to be able to work for themselves and regulate their own affairs. Freedom, responsibility, hard work, these are Conservative values. And yet I know that many felt badly let down by IR35 policies.”
He added: “When the Conservative Party returns to government, I want to be a chancellor for small businesses and the self-employed, that is why I’m here.
“What will that look like? Well, I’m committing today that the next Conservative government will replace IR35, not reform it, not review it, but replace it with a new system that respects the right of the self-employed to choose their status and only prevents actual abuse.”
Mr Griffith said he wanted to cut the amount of tax paperwork small businesses have to fill in.
He has commissioned a taskforce to investigate how to reform the tax compliance system, with a view to reduce the burden faced by small businesses.
It will be led by Tory peer Lord Mackinlay of Richborough, the former South Thanet MP, and Robert Colvile, the outgoing director of the Centre for Policy Studies think tank.
Small businesses face a combined cost of £25 billion a year because of tax compliance, and business owners spend 44 hours a year on tax paperwork, the Federation of Small Businesses has previously estimated.
Elsewhere in his speech, Mr Griffith urged his Government counterpart Mr Healey to rule out tax rises at the autumn Budget.
The Chancellor and Andy Burnham have both begun to adopt a sober tone about the state of the public finances ahead of the fiscal event on October 28.
Speaking on BBC Breakfast ahead of the speech, Mr Griffith said: “This is not a moment to put up taxes, we’ve had two budgets that have put up taxes to the highest ever recorded level, let’s just take that off the table.”
Taxes and the “fear of taxes” are driving “really big taxpayers to leave our country for overseas, taking hundreds of millions of pounds of tax revenues that will pay for public services”, he also warned.
Published: by Radio NewsHub