The Association of Independent Professionals and the Self-Employed (IPSE) has released its new manifesto, calling for a review of the UK’s tax system, which it feels is outdated.
As well as further tax-deductible training for new skills, incentivised use of workhubs for contractors and improved infrastructure, including faster broadband nationwide, the IPSE would like the review chaired by an independent expert, believing it necessary to take full account of modern working practices and accommodate them fairly within a reformed tax system.
With an increase of people working in the gig economy - short term and flexible work like Uber and Deliveroo drivers - IPSE’s Policy Development Manager, Jordan Marshall, said the existing legal framework for determining employment and tax status is “rooted in the master-servant relationships of the Middle Ages”. His primary concern is that the UK’s current system cannot effectively account for people choosing to work in this manner.
Marshall added: “Our tax system is also coming apart at the seams as new ways of working are forced into an outdated model.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.”
Making Tax Digital is currently on hold while the General Election campaigns ensue, but It is estimated that 1.1 million people in the UK are currently working in flexible and short-term job roles, regularly picking up work via crowdsourcing jobs sites such as PeoplePerHour.com and Freelancer.com. The Making Tax Digital process intends to ease the process for the self-employed as there will be a greater understanding of tax information and more contact with HM Revenue & Customs.
There are currently 4.8 million people in the UK who describe themselves as self-employed. In addition to their manifesto, the IPSE has detailed a new statutory definition of self-employment. They believe that autonomy in work, control over working arrangements, taking on business risk and level of independence from clients are all important considerations within the clarification.
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 manifesto urges the Government to reconsider 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 also calls for the Government to improve pension provisions, ensure fairer parental benefits and increase access to the Lifetime ISA. The IPSE manifesto: A Contract with the Self-Employed, can be read here.
Do you have questions about Making Tax Digital? Or are you self-employed and looking for advice on your taxes? TaxAssist Accountants are here to help. Call us today on 0800 0523 555 or fill out an online enquiry form.