It’s not only political parties who launch manifestos in the run-up to an election. Business groups and trade associations also like to have their say too. The latest organisation to launch a manifesto is the Association of Independent Professionals and the Self-Employed (IPSE). The manifesto named ‘A Contract with the Self-employed’ calls for a root and branch review of the UK’s current tax system, which it believes is outdated and unfit for purpose in the 21st Century.
So what is the IPSE manifesto demanding?
Well, along with further tax-deductible training for new skills, the incentivised use of workhubs for contractors and improved infrastructure for businesses, including faster broadband nationwide, the IPSE is calling for any future tax review to be chaired by an independent expert. It believes only an independent chair can take full account of modern working practices and understand how these practices can be accommodated within a reformed tax system.
So why does the IPSE believe a fundamental tax review is needed. The answer is because of the unprecedented growth in short term flexible work; better known as the ‘gig economy’. The IPSE’s Policy Development Manager, Jordan Marshall, said when launching the manifesto that the existing legal framework for determining employment and tax status is “rooted in the master-servant relationships of the Middle Ages”. His principle concern is that the UK’s existing tax system cannot cope with and accommodate people who choose to work in this manner:
“Our tax system is also coming apart at the seams as new ways of working are forced into an outdated model. The last Government’s disjointed attempts to deal with this resulted in a number of misjudged polices that hit the self-employed, including the disastrous changes to IR35 in the public sector, the National Insurance debacle and onerous Making Tax Digital plans,” he added.
So what is currently happening to the Making Tax Digital agenda?
Well, during the General Election campaign, Making Tax Digital is currently on hold. When it eventually restarts it is hoped the Making Tax Digital process will ease the process for the self-employed and the estimated 1.1 million people currently working in flexible and short-term job roles, by providing them with a greater understanding of tax information and making contact with HM Revenues & Customs easier.
So how many self-employed people are there in the UK?
Well, the IPSE believes there are currently 4.8 million people who describe themselves as self-employed. How accurate this figure is is difficult to say precisely, given the growth in short-term contract work. However, the IPSE believes its new definition of self-employment which includes autonomy in work, control over working arrangements, taking on business risk and level of independence from clients will help to clarify the exact situation.
IPSE CEO, Chris Bryce, said that this new definition will “end widespread confusion and ensure working for yourself remains an attractive and attainable career choice.”
The IPSE manifesto also urges the Government to reconsider its attempts to extend IR35 changes and to create a bespoke tax system for professional contractors. It also asks for Making Tax Digital to be simplified in order to benefit everyone. It is also calling for the Government to improve pension provisions, ensure fairer parental benefits and increase access to the Lifetime ISA.
If you would like further clarification about the Making Tax Digital process, or are self-employed and looking for advice on your taxes, then contact Stockport accountants, Steven Glicher. For more information on the new digital taxation system and how it might affect your business, contact Steven Glicher accountants on 0161 485 8007 or email info@.