Freelancing is still on the political agenda though perhaps not for the right reasons, writes Philip Ross, a former director of the PCG and the founder of the Labour Small Business Forum.
Unenviable exposure in the press
Contractors seem to be on the back foot from almost daily news reports of either senior figures or groups of public sectors workers masquerading as freelancers for tax purposes. It seemed to start with Ed Lester, worked its way through the BBC and now the focus is on supply teachers.
The case needs to be made for genuine freelancing because - at present - its practitioners seem to be getting tarnished with the wrong brush. Fortunately we did manage to put freelancing on the agenda at the meeting of the Labour Small Business Forum at the party?s conference last month.
Freelancing back on Labour?s radar
As chairman of the meeting, and for being an ex-freelancer who is also one of the founders of the PCG, which will soon run National Freelancers Day 2012, I used my propagative to bring it up. I was chairing a panel with Alistair Darling?s former Special Advisor; the Chairman of the Federation of Small Business and the CEO of the UK Games? industry?s trade association, as well as Toby Perkins, the Shadow Minister for Small Business.
I kicked off by noting that while Labour had introduced IR35, the current coalition government has backtracked on promises to abolish or reform the legislation.
Rise of the freelance workforce
Unfortunately, none of the political parties seem to ?get? freelancing, let alone completely understand it. It is disappointing because they need to understand that freelancing and the knowledge economy are the future and will be the way more and more people work.
I told the meeting: ?There are no jobs for life, or even careers for life and people will switch in and out of employment and self-employment and many will work in a small business and that freelancing is an integral and essential part of our business landscape?.
Then, I noticed nods from the audience after having said, ?the examples of tax abuses that are usually quoted about so-called ?service companies? mainly tend to come from the public sector. Yet it would be private [sector] and genuine freelancers who will bear the brunt of any legislative changes?.
IR35 is restrictive and unresolved
The Chairman Federation of Small Business agreed, by saying that IR35 is a complicated and unwieldy tax that has not been resolved and remains a bar for going into business.
The idea of crowdfunding was mentioned as method of finance for the games industry to avoid going to the banks.? Someone later said to me that IR35 has meant that if you are a technical person, once upon a time you could have gone into contracting to raise some finance to set up a software house - but not now.
What was clear from all the speakers, the questioners and the discussions that carried on afterwards was that IR35, despite the new guidance from HMRC in May, continues to cause angst and impediments. It is my intention to keep it and the importance of small business on the agenda.
Electoral reward for whoever ?gets? freelancing
After the forum?s meeting, someone remarked to me that if Labour can show that they get what it is like to be self-employed, to run a business or to be freelance and can innovate with issues like business finance, then they would be on the right path. For freelancing it was suggested to me that the abuse of limited companies by individuals isn?t on - as seen at the BBC - but IR35 was too extreme. I said that?s true but freelancers are forced by the market to use limited companies but are then penalised for it by the taxman.
I am convinced that the political party that gets the modern economy, and understands the professional flexible labour market and legislates to get it to work is the one that will get us out of our current mess.
Philip Ross is the author of Freedom to Freelance.
Source: http://www.contractoruk.com/news/0010801none_political_parties_are_fit_freelancings_purpose.html
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