The association of Independent Professionals and Self-Employed (IPSE) has delivered its reaction to the surprise announcement of the snap General Election by Mrs May outside 10 Downing Street. Apparently the Prime Minister changed her mind in the new pursuit of a mandate for Brexit and to smooth the path in getting her Brexit deal approved. Whilst the announcement was surprising it also came with a distinct air of inevitability about it too due to the small window of opportunity before the commencement of Brexit negotiations from September onwards. The shock announcement could potentially have numerous knock on effects to the self-employed and contracting sector.
The odds look likely for the Conservatives to maintain or better their parliamentary majority giving the Prime Minister the mandate she desires and therefore pointing towards a hard Brexit. The wider policy consequences are where things get particularly interesting for the self-employed. First of all, the conservative promise not to raise tax or National Insurance Contributions will have ceased. So what will their stance be going forward? There is clearly a desire to make changes as shown by the embarrassing u-turn earlier in the year and the fiscal position will not have changed. Therefore will the Conservatives try and target the self-employed again?
Further still, there is the Taylor Review, into employment practices in the modern economy, which will be delayed but not cancelled. The reviews recommendations may impact Government policy due to its bearing on the fundamental definition of self-employment and the rights the Government provides self-employed individuals.
IR35 is another issue which could be affected. Simon McVicker (director of the IPSE) asked if the Government will now be “emboldened to roll out the recent public sector changes in the private sector too? Will the Dividend Tax be adjusted?” These are really important questions that the Government needs to answer. It is anticipated that IPSE will publish their new manifesto and Freelance Limited Company tax proposal to answer many of these key issues in the coming weeks for the next Government.
During the Summer IPSE intend to undertake work on pensions and later life saving. Furthermore they will work with a leading think tank to evaluate how a tax system can be created for more flexible work and business world. In conclusion it is anticipated that self-employment will be towards the top of the political agenda no matter who wins the 2017 General Election.
Source: IPSE (http://www.ipse.co.uk) April 19th 2017 - A Snap General Election – What does it mean for the Self-Employed?