The Tories should take care with IR35 promises IR35 is a subject that has inspired a passionate response from accountants and IT experts. But despite this, the decision by the Tories to abolish it is unlikely to help much with election efforts.
Although a vocal group, IT contractors and others hit by IR35 make up only a tiny portion of the electorate, and Joe Public probably hasn’t registered the crackdown at all. Indeed most taxpayers would probably agree with moves to crackdown on those perceived – however unjustifiably – not to be paying their fair share.
This is one reason why Tories should take care with reforms. Headlines about IT experts fleeing the UK could turn into headlines about fat cat experts being given preferential tax treatment.
But in the short-term, the Tories’ move will no doubt earn them some good headlines and curry favour from contractors. But what would be the situation if the party made it into government?
The Tories promise new ‘targeted’ rules to deal with the abuses the Labour government attempted to halt with IR35.
Whether there will be an improvement is far from certain. However good their intentions, for the sake of the contracting sector, and for their own popularity in the business community, they will have to ensure they don’t simply replace one nightmarish set of complex rules with another.
Traditional danger for Brown
Eileen Mallan and Leona Reid are not names that stir memories of Gordon Brown’s first Budget back in 1997. But it was with Eileen and Leona – the two Rosyth dockyard apprentices who made the chancellor’s new Budget box – that Brown posed before he crossed Parliament Square to address the Commons.
This was a carefully staged photo opportunity designed to demonstrate the new chancellor was a man who would break with traditions. And when Brown stands up on 7 March to deliver the last Budget of this government, he will be keen to show once again he is no traditionalist.
But there is one temptation he is unlikely to be able to resist. Brown is expected to deliver a give away Budget designed to appeal to voters ahead of May’s probable general election.
While Labour spin-masters hope Brown’s measures will win over electors, there is a danger business will be sidelined.
And while it would be incorrect to suggest UK plc is clamouring for tax cuts, a failure to cut red tape – or, worse, imposing extra bureaucracy on business – could prove as damaging for the government at the ballot box as it does for the companies themselves.