While the right-leaning part of our free and fearless press brings its jeering and unsubtle attack on Labour leader Jeremy Corbyn to its final peroration, The Red Team has once more been showing that it is on the side of those real working people whom the press and their hangers-on claim to champion, but usually ignore.
Back in the days of the New Labour Project, many self-employed workers used Limited companies - the then Inland Revenue had been a prime mover in guiding them in that direction - to manage their earnings and taxes. This enabled them to pay themselves an amount as salary - attracting both Income Tax and National Insurance contributions - and an amount as a dividend, which did not attract NI.
The unspoken but implicit quid pro quo was that these self-employed workers enjoyed an insecure tenure, and no holiday or sick pay. They received no pension entitlement. They dealt with all that pesky tax malarkey themselves. But someone in the Treasury got it in their heads that many were “Friday to Monday” contractors - they left salaried employment at the end of one week, and reappeared as freelance workers the next. Most did not.
Thus arrived IR35, which closed the dividend loophole, and is now causing significant worry to many minor slebs. A job that can be equated to full time employment is held to be “caught” by IR35. All payments to that self-employed person must be classed as salary and subject to NI contributions. It was not Gordon Brown’s finest hour.
And now, the Tories are looking to tighten up IR35 yet further. Not Labour. As Politics Home has reported, “Bill Esterson, Labour’s Shadow Small Business Minister, confirmed at an IPSE and small business debate last night that if elected, the party would halt the roll-out of the changes to IR35 into the private sector next April … [he] said: ‘We absolutely can’t see it rolled out into the private sector the way things are at the moment.’”
There was more. “Asked later to confirm it was Labour Party policy to review IR35 and not roll the changes out to the private sector in April 2020, he tweeted: ‘absolutely’”. He also said “We need to support the self-employed in this country. We need to make sure that our tax system is diverse so that it matches the needs of being self-employed and is also consistent with the risk that is taken.” Also, “Mr Esterson also directly cited IPSE’s manifesto when explaining Labour’s commitment to clamp down on late payments”.
What are those changes to IR35 that are slated to come in next year? Contractor UK spelt it out. “The changes to IR35 are that rather than set their own status, limited company workers will lose the right to the large or mid-sized companies that hire them, who will set status for them. But to avoid having to decide status for every contractor they hire, and follow the associated procedures, more and more engagers say they will simply not take on such workers anymore”. Thus alienating freelance workers even more.
Labour has now committed to halt those changes. The cost to the Exchequer would be minimal. It would hardly register. Yet that one gesture has brought a more sympathetic view of The Red Team from another significantly-sized group of workers. Meanwhile, the Tories and their cheerleaders are Looking Over There at Corbyn’s Brillo interview.
So you will not read about this in the papers this morning. I’ll just leave that one there.
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