How Liz Truss can win over the self-employed

By Andy Chamberlain on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs Truss needs to revitalise a sector that contributes £303bn to the UK economy, says IPSE’s director of policy Andy Chamberlain The post How Liz Truss can win over the self-employed appeared first on Small Business UK.

Sep 7, 2022 - 21:54

How Liz Truss can win over the self-employed

By Andy Chamberlain on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

After weeks of campaigning, Conservative Party members have picked Liz Truss as prime minister over former chancellor Rishi Sunak.

We already have a sense of what a Truss-led government will prioritise. The former foreign secretary has repeatedly talked about the need to cut taxes and is likely to follow through on her rhetoric as prime minister. She has also spoken about the need to stand up to Russia post Ukraine and is widely predicted to continue sanctions against the country in Number 10.

For the self-employed, Truss has talked briefly – though encouragingly – about tackling treasury orthodoxy and helping freelancers during last month’s Conservative Party hustings in Wales. She has also pledged to reform IR35 tax rules.

Winning trust

While I and many others have welcomed her support for the self-employed during the hustings, we shouldn’t get our hopes up just yet. Freelancing has been shaken to its core over the past two years, and we need less talk, and more action. In other words, if Truss is going to get the support of thousands of self-employed workers, then she needs to show that she will follow through on her campaign promises.

At IPSE, we believe Truss needs to unveil a plan that can revitalise a sector that contributes £303bn to the UK economy and provides businesses across the country with innovation, entrepreneurism and dynamism – skills that are paramount to the success of any company. She also needs to ensure that any promise she makes shows how she can increase the numbers of self-employed workers, after two years of pandemic uncertainty which ruined 11 years of continuous growth in the sector.

What Liz Truss needs to do

Truss has pledged a “business revolution” which includes a reform of IR35, the most important issue impacting freelancers. The flawed reform has shifted the responsibility for determining notoriously difficult employment status decisions from self-employed workers to their clients.

The changes have devastated self-employed workers and created mass uncertainty and confusion for hirers and contractors alike. In fact, IR35 is so destructive that IPSE research has found that more than a third of freelancers (35 per cent) have closed their businesses since the changes. Moreover, the reforms are so difficult to understand that one in two businesses (47 per cent) have reported that IR35 has been a significant administrative burden since its implementation in the private sector in April 2021.

Truss also needs to demonstrate that she is prepared to grasp the nettle on tricky issues like clarifying employment status rules – something which the government had been committed to doing for four years, until it decided to not to last month.

While Truss has the support of Conservative Party members, she doesn’t necessarily have the public’s support. If she wants to get one of the innovative parts of the UK economy on her side, then she needs to tackle a number of other issues affecting thousands of self-employed workers.