From the Conservative Conference in Manchester: Recruiter reports
1 October 2013
The government has been urged to simplify the UK’s taxation system to give a shot in the arm to the UK’s flexible workforce.
Tue, 1 Oct 2013The government has been urged to simplify the UK’s taxation system to give a shot in the arm to the UK’s flexible workforce.
At a meeting at the Conservative Party Conference held in Manchester last night [30 September], hosted by the Recruitment & Employment Confederation (REC), contractors’ representative group PCG and think-tank Demos, speakers including Conservative members of parliament agreed that the continued growth of the UK’s flexible workforce was being hindered by complex rules and regulations, such as IR35 that deals with the issue of disguised employment.
The meeting heard that one in seven workers in the UK are self-employed in some form, be that as a contractor, consultant, freelancer or interim manager. According to the PCG, flexible workers contribute more than £100bn a year to the UK economy.
Kate Shoesmith, head of policy at the REC, told the meeting that “a lot needed to be done around regulation” and went on to describe IR35 as “confusing to everyone” and “dreadful”.
Shoesmith added that rather than introducing new rules and regulations to deal with issues, the government should focus more on enforcing existing rules properly.
John Brazier, PCG’s director of corporate and strategic affairs, said that HM Revenue & Customs “had to be encouraged to embrace flexible working rather than to fight against it”. He suggested that one of the problems was terminology, with not even flexible workers themselves clear whether to call themselves freelancers, contractors or self-employed. “Perhaps we need a new definition,” he said.
MP Adam Afriyie said that one factor at play was the “politics of envy” caused by the perception that freelancers had “a slight tax advantage” over PAYE workers. He suggested that the solution was for the government “to move towards a simple flat rate of tax, with a big tax threshold” that would be the same for all workers. This would include the abolition of National Insurance, he said. Afriyie said that this would resolve the issue within a few years.
Chris Pincher MP said the complexity of the current tax rules meant they were open to manipulation: “The rules have to be very simple and very clear.” He said the main benefits would be that everyone would be treated the same, irrespective of their employment status or their legal contract.
Max Wind-Cowie, head of the Progressive Conservatism Project at Demos, added: “No one should be advantaged or disadvantaged by the way they chose to organise their lives.”
At a meeting at the Conservative Party Conference held in Manchester last night [30 September], hosted by the Recruitment & Employment Confederation (REC), contractors’ representative group PCG and think-tank Demos, speakers including Conservative members of parliament agreed that the continued growth of the UK’s flexible workforce was being hindered by complex rules and regulations, such as IR35 that deals with the issue of disguised employment.
The meeting heard that one in seven workers in the UK are self-employed in some form, be that as a contractor, consultant, freelancer or interim manager. According to the PCG, flexible workers contribute more than £100bn a year to the UK economy.
Kate Shoesmith, head of policy at the REC, told the meeting that “a lot needed to be done around regulation” and went on to describe IR35 as “confusing to everyone” and “dreadful”.
Shoesmith added that rather than introducing new rules and regulations to deal with issues, the government should focus more on enforcing existing rules properly.
John Brazier, PCG’s director of corporate and strategic affairs, said that HM Revenue & Customs “had to be encouraged to embrace flexible working rather than to fight against it”. He suggested that one of the problems was terminology, with not even flexible workers themselves clear whether to call themselves freelancers, contractors or self-employed. “Perhaps we need a new definition,” he said.
MP Adam Afriyie said that one factor at play was the “politics of envy” caused by the perception that freelancers had “a slight tax advantage” over PAYE workers. He suggested that the solution was for the government “to move towards a simple flat rate of tax, with a big tax threshold” that would be the same for all workers. This would include the abolition of National Insurance, he said. Afriyie said that this would resolve the issue within a few years.
Chris Pincher MP said the complexity of the current tax rules meant they were open to manipulation: “The rules have to be very simple and very clear.” He said the main benefits would be that everyone would be treated the same, irrespective of their employment status or their legal contract.
Max Wind-Cowie, head of the Progressive Conservatism Project at Demos, added: “No one should be advantaged or disadvantaged by the way they chose to organise their lives.”
- Click for more recruiter.co.uk coverage from last week’s Labour Party Conference, and from the Liberal Democrat's conference earlier in September.
