Unfortunately, despite the Lib Dem call for the IR35 reform to be scrapped, the Government has announced it will go ahead with the reform from April 2021.
Before I get onto the effects it will have on the Self-Employed, let us go over a little background. In the 2019 General Election, the Liberal Democrats were the first to address the IR35 reform, saying they would review it. Ed Davey said it would “undermine the flexibility of self-employed people”. They were followed by Labour, who pledged to halt the IR35 reforms, then went back on it, then changed their minds again. This is only one part of Labour’s confusing relationship with IR35 as it was the idea of Gordon Brown in the first place! The Conservatives, “the party of business”, worried contractors with their silence over the issue until Sajid Javid announced that if the Tories retained their Government, they would review the IR35 reform, it was more a last-minute vote grab than a policy.
Anyway, back to now, what effects will this reform have on self-employed? The aspect of the IR35 reforms with the biggest impact has been the responsibility of employment status being on the client/employer/agent rather than what was previously the responsibility of the contractor/employee to evidence.
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