Andrew Griffith MP says Tories would reform IR35

Shadow business secretary Andrew Griffith used his Conservative Party conference speech to pledge to reform IR35.

Griffith said at 14:45 of his speech yesterday in Manchester that the Tories "doing better for the self-employed" included "looking again at reforming IR35."

A former executive for Sky, which has suffered 'inside IR35' rulings on a string of presenters, Griffith was at the Treasury at the time of mini-Budget 2022.

Andrew Griffith MP has been consistent on IR35

Griffith's role was Financial Secretary to the Treasury (the minister responsible for HMRC) in the Liz Truss-led government, under which Kwasi Kwarteng was chancellor.

"[And that's] the [Tory] government that would have scrapped the IR35 reforms, if it only lasted long enough," says IPSE head of policy Fred Hicks.

"[Therefore, Conservative] party history aside, Andrew has been consistent in [his] views on IR35 — from what I can see."

Taxman needs to respect taxpayers

In his conference speech, Griffith told HMRC that it "needs to respect" those taxpayers "whose hard work and enterprise" pay its officers' salaries.

He further criticised the tax authority for trying to close its phone lines for six months.

And he said callers to HMRC should now be able to "rate their experience".

Looking again at reforming IR35

After his 'taxman should respect taxpayers' point, Griffith made his IR35 reform pledge.

"Nowhere is that more important than the self-employed," he started.

"They're risk-takers, striking out on their own, often with nothing more than a laptop and a belief that they can make it work.

"That's why we commit today to doing better for the self-employed. And that includes looking again at reforming IR35.

"Because, if Britain is to have ladders of opportunity, then the self-employed need to be able to climb them."

Repeal Family Business Tax

Griffith's pledge to reform IR35 if the Conservatives are returned to power failed to win any applause from conference delegates.

In fact, his 'look again at reforming IR35' vow only received a single, audible, "hear, hear."

By contrast, another surprise pledge from chartered accountant Griffith — to repeal the "Family Business Tax" — did win applause.

The MP was seemingly referring to IHT for business owners, not the "Family Business Tax" which was briefly conceived (but ultimately rejected) following a House of Lords win for husband-and-wife IT company Arctic Systems Ltd over HMRC.

Contractors have shouldered Off-Payroll Working rules uncertainty

But it's the shadow business secretary's vow to review the IR35 Off-Payroll Working (OPW) rules that last night lit up social media.

Rebecca Seeley Harris, an employment status specialist, isn't surprised at the strength of feeling being displayed online.

"[This] pledge should resonate strongly with contractors who've shouldered years of uncertainty under the OPW rules," the boss of ReLegal Consulting told ContractorUK.

Griffith previously welcomed IR35 reform's planned repeal

In a statement, Seeley Harris continued: "Interestingly, back in 2022, Griffith also welcomed the planned repeal of the IR35 off-payroll working reforms, saying 'it would lighten the load on the self-employed.'

"However, any credible, [Conservative government IR35] review must go beyond tweaks.

"It should restore clarity, align tax with true employment status, and remove double taxation risks."

Seb Maley, of Qdos, suggests that 'credibility' could be why Mr Griffith's IR35 pledge might not win as many contractor-supporters as the Tories think.

Tories haphazardly rolled out public and private sector IR35 reforms

The IR35 contract review firm's CEO, Mr Maley says:  "A clear move to win back the support of the UK's smallest businesses…[is], on the face of it, a welcome promise.  

"Although, I have to say, it's a touch difficult to ignore that this is the party that haphazardly rolled out public and private sector reforms."

Conservatives created messy IR35 reforms in the first place

Charlie Hemsworth of IR35 status advisory Bauer & Cottrell (B&C) confirmed to ContractorUK:

"Contractors won't forget that it was their reforms — the Conservatives' IR35 reforms — that created the mess we're still dealing with today," says B&C's director.

"And not only have we heard this before…[from the Tories, in both 2009 and 2019], but unless the Conservatives end up back in power at the next election, it means very little."

Press release politics

In his speech to the Tory conference —the same speech he used to pledge to review IR35 — Griffith attacked Labour for what he called "press release politics."

Positively for Personal Service Companies (PSCs) hoping for action on IR35, IPSE says the currently least popular of the 'big three' parties isn't alone in targeting the OPW rules.

Three big opposition parties all have IR35 in their sights

Taking to LinkedIn in his role as policy director at the Association of Independent Professionals and the Self-Employed (IPSE), Mr Hicks reflected:

"What's most interesting to me is that we now have three 'big' opposition parties (big in the polls at least), Tories, Lib Dems and Reform. All…[are looking at] fixing or scrapping IR35 as official policy."

Hicks was likely referring to Reform's 2024 election manifesto ("Abolish IR35 rules to help sole traders") and Lib Dems' 2024 manifesto ("Review the government's off-payroll working IR35 reforms to ensure self-employed people are treated fairly").

In business on their own account

However Carolyn Walsh, who used to be a tax inspector for the Revenue, all but told ContractorUK that she's not holding her breath.

"I don't think the government ever puts helping small businesses and making things easier for contractors in the same sentence," she says.

"The current government is set to overhaul the employment status manual which will narrow the definition of a 'self-employed business owner.'

"Anyone who is in business on their own account, according to those new definitions, will have access to the 'ladder of opportunity.' And I suspect it's those few that the shadow business secretary is referring to."

IR35 reform may even become a thing of the past

Bauer & Cottrell agreed, saying Labour's employment status proposals are 'more important', especially as they may potentially render the OPW rules redundant.

Hemsworth said: "The employment status framework, in general, could look very different in the not-too-distant future.

"With the employment consultation promised by the end of this year, that's where focus should be at the moment. If that leads to drastic and proper change, the need for an IR35 reform may even become a thing of the past."

Ladders of opportunity

To inform Labour's employment status consultation before it launches, ReLegal Consulting's Ms Seeley Harris will share with Mr Griffith an "employment status roadmap" which she's drawn up.

She told ContractorUK: "I launched the roadmap [which I'll now send him] at the Labour Party conference.

"The exchequer secretary to the Treasury [Dan Tomlinson MP] and secretary of state for business [Peter Kyle MP] already have a copy.

"If the Conservatives are serious about creating 'ladders of opportunity,' that ambition must extend to the self-employed professionals who drive flexibility, innovation and growth across the UK economy."

Shame

Sounding aware that the Tories have previously pledged to review IR35 in return for votes, another IT contractor offered:

"Fool me once, shame on you.

"Fool me twice, shame on me."

Actions speak louder than words

IR35 expert Danny Batey, senior tax consultant at Markel Tax, told ContractorUK:

"I'm sure [that with this Conservative IR35 reform pledge by Andrew Griffith MP] many contractors will be thinking 'here we go again.'

"While it is always positive to have IR35 back under the microscope, actions will speak louder than words.

"I imagine this statement will be treated by many with some scepticism, especially as it has been made by the political party who have previously carried out a review of IR35 yet still decided to push ahead with Chapter 10 anyway."