The Spring Statement was not meant to be a big event and in that way it lived up to expectations. That it included a few rays of sunshine for the self-employed was welcomed. But you cannot get away from the fact that Brexit dark clouds loomed over this statement and the uncertainty it brings. Additionally, the government’s seeming determination to push on with its consultation on extending the changes to IR35 from the public sector to the private sector has also left a deep foreboding.
But the good news first, Eeyore turned self-proclaimed Tigger of the treasury Philip Hammond said he would be consulting on taxfree training for the self-employed. If this consultation turns into something concrete, it will be a big victory for IPSE and the self-employed.
IPSE is the only organisation campaigning for this tax relief. And as our report on vulnerable work shows, opening up training options is one of the best ways to help people in financially insecure work. So we’re going to hold our newly Tiggerish chancellor to this.
The other big nugget for the self-employed in the chancellor’s gag-laden speech was his pledge to clamp down on late payments. This is no laughing matter as our research has shown that the average self-employed person spends 20 days a year of their valuable time chasing clients who have failed to fork out for their work. The government has already taken up IPSE’s calls for a small business commissioner to hold clients to account, but more still needs to be done.
But beyond these two glittering nuggets, the Spring Statement was far from golden for the self-employed. First, behind the jibes and ‘little red book’ jabs of the chancellor’s speech, there was something that could turn out to be a major jab at the self-employed: the announcement that in the coming months the government will publish a consultation on improving IR35 compliance in the private sector.
As every self-employed person has heard by now, the changes to IR35 in the public sector have been nothing short of a disaster, so it was surely a relief that the rumours about the chancellor using the statement to extend them turned out to be untrue. Nevertheless, the compliance consultation and the threat of extending the changes in future loomed large.
Then there is the no less concerning ‘call for evidence’ on potential changes to the current VAT regime. Although it’s not a consultation, this is a real dark cloud hanging over the Spring Statement and something that could hit the less well-off self-employed really badly if the VAT threshold is lowered, as some have suggested.
Many self-employed would find themselves choosing between raising their prices – causing them to lose customers – or absorbing the VAT cost themselves, doing significant damage to their businesses. It would also strangle many self-employed people in a sea of red tape they can ill afford to deal with.
IPSE will be very clear with the chancellor that lowering the threshold would have disastrous consequences for the UK’s self-employed population.
And what of the Brexit dark clouds? While the chancellor’s growth figures seemed superficially good, they are still the worst amongst leading economies. We also still do not know what sort of deal Britain will get and the treasury has not retracted its earlier view that the departure is going to badly hurt the UK economy. No wonder IPSE’s own freelancer condfidence index is at its lowest ebb. Nothing in the statement gave any reassurance that Brexit was going to be good for Britain.