Tuesday 30 June 2020 6:51 pm

Lib Dem leader Ed Davey calls for government to scrap IR35 tax reforms

Acting Liberal Democrat leader Ed Davey has tabled an amendment to parliament in a bid to quash the government’s planned IR35 tax reforms.

Davey has attached an amendment to the government’s finance bill, set to come before the House of Commons tomorrow, asking for the mooted taxation changes to be scrapped in order to protect self-employed workers.

Read more: IR35 reforms to be delayed for a year due to coronavirus

The IR35 changes would see companies treat self-employed workers as employees for tax purposes, without having to provide standard employment rights such as statutory sick, maternity and redundancy pay. 

The government is seeking to make the reforms in order to clamp down on tax avoidance by targeting contractors for companies who are, in practice, providing the same service as employees.

It was supposed to be implemented in April, however the government postponed the changes for a year due to the coronavirus crisis.

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Davey, who is currently seeking permanent election as Liberal Democrat leader, is now urging the government to scrap the changes completely.

“Self-employed people face an unprecedented threat to their livelihoods due to the pandemic,” he said.

“The Conservative government’s insistence on their IR35 policy risks making the plight of many self-employed people even worse.

“Delaying the change to next April will do next to nothing to reduce the impact of Covid-19 which will be felt for months – if not years – to come. This is not the time to add to the burden of the self-employed.”

IR35, also known as off-payroll working, has received a mixed response from the private sector, with many self-employed worker lobby groups rallying against the changes.

In March, tax consultancy firm Qdos called the reform “short-sighted” and “needless”.

Dave Chaplin, director of the Stop The Off-Payroll Tax Campaign, welcomed Davey’s amendment.

“A delay to the roll-out of off-payroll would be great news for the thousands of contractors who will be badly affected by the legislation, but it doesn’t make sense for this flawed legislation to enter statute,” he said.

Read more: Fury as IR35 is confirmed in 2020 Budget

“Why plant this tax-bomb now?

“Let’s hope tomorrow brings some good news and we can finally have a proper review as promised by the Tories in their election manifesto.”

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