Boris wants delivery through energy, optimism and can-do spirit? Sounds like the self-employed - IPSE

Posted On: 
1st August 2019

At the end of his first week as Prime Minister IPSE call on Boris Johnson to get behind the self-employed.

Self-employed people have the energy, optimism and can-do spirit Boris Johnson celebrates, writes IPSE.
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As it reaches the end of its first full week, Boris Johnson’s new Government faces unprecedented economic challenges. Brexit dominates, but ministers must also contend with fundamental changes in the way people want to work. This is against the backdrop of an unforgiving world economy, where Britain simply cannot take its competitive advantages over rising nations for granted any more.

As the new PM said, it’s easy to take a gloomy view of Britain’s chances. But he’s right that it may be possible to build a powerhouse Britain through energy, optimism and can-do spirit – if he gets behind the businesspeople who most embody those virtues: the self-employed.

Just taking the plunge into freelancing takes all the qualities Mr Johnson asks for. It can be a challenge, but the vast majority who do it wouldn’t go back. Nor do we want them to. The one-in-seven British workers who are self-employed contribute £275bn to the economy every year – enough to fund the NHS twice over.

Freelancers’ contribution doesn’t end there either. They are the dynamic force that drives entrepreneurialism, innovation and productivity – everything we need to be globally competitive. Either by pursuing their own ideas or as a flexible workforce that brings unique skills and reduced risk to larger firms, British innovation would grind to a halt without them.

Freelancers will have high hopes for Sajid Javid, Andrea Leadsom and Amber Rudd as Chancellor, Business, and Work and Pensions Secretaries. They have a strong pro-business background with rhetoric to match.

The government must urgently, however, repair its relationship with the self-employed, who still feel bruised from their treatment by the Treasury in particular. There can be no repeat of the last administration, which hounded the self-employed with short-sighted and clumsy tax-grabs. Not just trying to raise Class 4 NICs (which led to an embarrassing u-turn), but also pushing through the disastrous changes to IR35 off-payroll rules and the retrospective loan charge.

From its work with thousands of freelancers, IPSE (the Association of Independent Professionals and the Self-Employed), has identified five key steps the government must take to unleash the potential of entrepreneurs and the self-employed: 

  • Build a modern tax system for the self-employed: the UK’s overly complex tax system needs clarifying and updating from the 19th century model to something fit for the future and rising self-employment. The Chancellor should begin by scrapping the damaging changes to IR35 in the private sector and shift its focus on the Loan Charge to the companies that sold these schemes in the first place.
  • Clamp down on late payment: freelancers spend an average of 20 days per year chasing late payment and, in some sectors, lose an average of £5,000 per year to clients who fail to pay. The Business Secretary must continue to strengthen the role of the Small Business Commissioner to stamp this out.
  • Promote British business and entrepreneurialism: at present, the UK’s nearest trading partner, Ireland, has a corporation tax rate of 12.5 per cent. For the UK to remain competitive and a good place to do business, we recommend that the Chancellor equalises corporation tax with Ireland.
  • Improve broadband infrastructure: entrepreneurism and footloose freelancers could be unleashed across the UK, from cities to rural villages, if they have access to consistent, superfast broadband. Currently, adequate coverage is limited to urban hubs. We want to see the PM deliver on his promise to bring super-fast broadband services for all by 2025.
  • Improve the pensions prospects of the self-employed: The pensions industry is starting to improve its offer to the self-employed but the overall provision is still poor. We believe the Government should encourage the self-employed to save for later life by supporting the rollout of the ‘sidecar pension’.

Committing to these would be a quick win that will help to unburden the freelance sector and allow them to get back to what they do best – adding value to businesses and innovating to keep Britain one step ahead.