Labour proposes new employment law-Are you affected as IR 35 tax changes?
Employment definition would be altered by the Labour Party, under newly released plans in a bid to create a single “worker” status. While these plans have been welcomed, some have warned they do not go far enough, especially in the face of ingoing IR35 difficulties.
The Labour party announced plans to give people security in employment with the creation of a single worker status. This status would encompass all but the “genuinely” self-employed which, Labour detailed would afford employees rights and protections form their first day of work.
We need a new deal for working people. Labour would ensure that all work balances the flexibility workers want with the security they deserve.” The new worker status will “replace the three existing employment categories” of employee, worker and dependent contractor.
The Association of Independent Professionals and the Self-Employed (ISPE) responded to this news, warning that without clearly defining what distinguishes “false” from “genuine” self-employment, the proposal risked “seriously undermining” the 4.2 million-strong self-employed sector.
As an alternative, IPSE proposed instead of attempting to roll all statuses into one, a statutory definition of self-employment should be written in law- to grant “much-needed rights to falsely self-employed people while also protecting the freedom of the genuinely self-employed.
Andy Chamberlain, the Director of Policy at ISPE, commented: “It’s veery welcome that Labour is trying to tackle the confusion around worker rights, but these plans fail to grasp the nettle of employment status.
“And without more clarity on this issue, they risk seriously undermining the 4.2 million-strong self-employed sector.
“While it is absolutely right to try and clear the confusion in parts of the labour market such as the gig economy and secure rights for falsely self-employed people, it is essential to engage with the question of what exactly makes someone self-employed.
“Without this, structural change could threaten the freedom, flexibility and livelihoods of genuine freelancers.
Similar sentiment was shared by Dave Chaplin the CEO of contracting Contractor Calculator, who argued exisiting IR35 tax laws should be abolished to remove employment uncertainty.
Mr. Chaplin said: “The Labour proposals are admirable and it could finally put a stop to the zero-rights employment models that have emerged in the flexible workforce which are facilitated by quasi-employment models designed to circumvent the need of corporations to give workers their deserved rights.
“At the lower end of the pay scale, vulnerable workers have little, if any, bargaining power and are given a Hobsons choice to either accept poor working conditions with few rights or get no work at all. This has to stop.
“But, we must also protect both parties in situations where they have entered into a relationship of self-employment in good faith. Neither should be able to change their mind later causing costly litigation. Also, the taxman’s IR35 legislation should be abolished to remove the uncertainty in the sector which is currently causing mayhem in the market, and pushing workers into unregulated tax avoidance schemes.
“Governments have been consulting on this topic for a decade, and nothing has yet changed. This is a bold and ambitious policy by Labour, who will first need to get into power. We could be a decade away from changes.”
