IPSE, the Association of Independent Professionals and the Self-Employed, has released a manifesto demanding better support for the self-employed from the next government.
A Contract with the Self-Employed calls on the new government to implement a fairer, more efficient tax system, including creating a bespoke system for freelancers and a review of pensions arrangements for the self-employed.
The manifesto calls for:
- The government to maintain the current rate of Class 4 National Insurance Contributions (NICs) paid by the self-employed. The attempt to raise Class 4 NICs at the last Budget was met with resistance, causing the chancellor to u-turn on the idea. The IPSE manifesto states that "The slightly more advantageous tax regime enjoyed by the self-employed is a recognition of the fact they take on responsibility for their own welfare and business risk, which benefits UK business and the economy as a whole".
- Responsibility for making tax policy to be removed from HMRC entirely. The manifesto said HMRC should concentrate on enforcement, collecting revenue and handling taxpayer enquiries. "Tax policymaking should rest with HM Treasury where it can be properly overseen by ministers," the manifesto stated.
- Self-employed parents to be supported by a form of statutory maternity pay and paternity pay, and an adoption allowance to be put in place.
- The next government to consider how the rules around 'Keeping in Touch Days' can best support self-employed mothers.
- A wide-ranging review into pensions for the self-employed, which should explore auto-enrolment and a ‘portable benefits system'. It said the review should also consider the design of a self-employed pension that allows temporary drawdown to cover fallow periods of work, with this being tax-free if repaid in full within 24 months.
- More of a strategic approach to "misjudged policies around IR35". The call comes in the wake of the government shifting the IR35 burden of considering whether it applies to agencies and end clients in the public sector rather than the contractors themselves.
The manifesto also called for a statutory definition of self-employment. This should, IPSE said, consider the principles of: autonomy in work, control over working arrangements, taking on business risk, and the level of independence from clients.
Chris Bryce, IPSE's CEO, said he wants to see a “fair deal” for this type of worker. “The self-employed will not be silenced,” he said. “It’s not just that they make up 15% of our workforce; they’re also one of the most dynamic and productive sectors of our economy and their contribution will be vital in the years ahead.
“IPSE has laid out firm recommendations for how the next government can support the self-employed. Knee-jerk tax hikes aren’t the answer – instead we need a comprehensive review of the UK pension and tax systems to ensure a fair deal for the self-employed.”
James Collings, IPSE's chairman, said he was hopeful the Taylor Review into new working practices, due out later this month, will take a sensible approach to regulating self-employment.
“The ongoing Taylor Review presents an excellent opportunity for the next government to approach self-employment in a rational way – ensuring the millions going it alone are supported rather than attacked, and that there are regulations in place to clamp down on the unscrupulous companies forcing people into self-employment,” he said. “For this reason, we believe it is essential the next government adopts a statutory definition of self-employment to ensure clarity on the issue and acknowledges that the self-employed fend for themselves in many ways.”
The manifesto highlighted the major contribution of self-employed people to the British economy. It stated that 4.8 million people are self-employed in the UK, which is roughly one in seven of the working population. They contribute £255 billion to the UK economy, equivalent to paying for the entire NHS twice over, the manifesto stated.