In Truss we Trust? What the self-employed need from the new PM and her Cabinet
For those freelancers out there that were worried about Rishi Sunak being offered a role in new Prime Minister Liz Truss’s cabinet and leaving the self-employed out in the cold this winter, it has emerged that he will not be on hand to influence policies.
For those that have been loyal to the former Chancellor of the Exchequer, his next move is still a mystery as Sunak told the BBC on Monday that the cabinet was “not something I’m thinking about”.
Now onto the new cabinet. Kwasi Kwarteng, Truss’s closest cabinet ally, will become her chancellor, and she is also expected to confirm the appointments of Suella Braverman as home secretary and James Cleverly as foreign secretary, The Guardian has reported. Those appointments will mean that, for the first time, there will be no white men in the four great offices of state.
Thérèse Coffey, a longtime friend of Truss’s, is expected to become health secretary, said the Guardian, and Ben Wallace has asked to stay on as defence secretary.
If we can make it easy for SMEs to drive job creation and flourish, the rest will take care of itself.Sam Alsop-Hall, Chief Strategy Office at Woodrow Mercer Healthcare
What do the solo self-employed want from Liz Truss?
Everyone wants energy bills kept under control. If new reports are anything to go by that could be a reality sooner than expected. Liz Truss’ ministers reportedly held talks with energy bosses last night to work out the terms of an energy price freeze, which could be unveiled as soon as Thursday. The government will be subsidising energy bills. Now who or what is going to end up paying for that down the line is yet to be seen. But it shows Truss could be taking action, which is what consumers and business owners want.
Graham Cox, Director at SelfEmployedMortgageHub.com believes the new PM could for the most part be a welcome change of thinking in Number 10 where the self-employed are concerned.
“Liz Truss has certainly got her work cut out,” says Cox. “I think she’s broadly got the right idea that taxes need to be cut. We can’t tax our way out of our debt mountain, we need to aggressively grow the economy. That means raising personal tax allowances, lowering income tax and reversing increases to National Insurance and corporation tax,” he says.
Others believe a larger focus on SMEs will create a solid base of security for the British economy. “It’s time to put business and business growth first,” says Sam Alsop-Hall, Chief Strategy Office at Woodrow Mercer Healthcare.
“If we can make it easy for SMEs to drive job creation and flourish, the rest will take care of itself,” he says.
Rachel Hayward, MD at Ask the Chameleon, is also of the mindset that SMEs have to be front and centre of any new plans set out this week or next week under the new PM and her Cabinet:
OK Liz so you said you can deliver (3 times) and this has been the longest job interview ever, so let’s see your grand plan, as we need you to hit the ground running like a cheetah and start with some concrete plans to help small businesses survive (energy freeze, VAT reductions etc). Show us you have a grasp on industry and the world beyond Whitehall.Rachel Hayward, MD at Ask the Chameleon
Are offshore tax grabs the answer?
Cox also believes that something has to be done about the imbalanced tax breaks of the wealthy to improve the financial welfare of the majority of taxpayers.
“The elephant in the room is corporate offshore tax evasion,” says Cox. “We could transform the economy and living standards if we were to finally get serious about confronting this issue, rather than enabling it. Short-term, Truss must address the cost of living crisis. An energy cap freeze appears the only way out, because we just don’t know how expensive energy will become, or for how long,” says Cox.
An independent review of IR35 that results in change must be prioritised – that is if the new Prime Minister genuinely wants to unlock the full potential of the flexible workforce.Qdos CEO, Seb Maley
Is Truss’ IR35 review promise a sure thing?
When reviewing IR35, Truss and the HMRC must appreciate that freelancers are not just IT contractors that use recruitment agencies, it’s anyone going out and building a business on their own and carving out a loyal client base for their goods and services. To hinder the UK workforce’s ability to become self-employed by bundling them down with unnecessary burdens, such as blanket bans alongside 30% salary cuts and unfair and unjustified taxes — without the requisite benefits — is doing the economy no favours.
A Qdos poll of 476 contractors showed that 94% believe Liz Truss’s pledge to review IR35 is an “empty promise”.
Qdos CEO, Seb Maley, commented on what he believes Truss must do to win the trust of freelancers:
Liz Truss has the opportunity to win start winning back the support of the self-employed, who have been badly let down in recent years and lost faith in the Conservative Party. For far too long, freelancers, contractors and self-employed workers have been overlooked by the government and hit with short-sighted tax reforms and hikes that threaten this way of working.
Maley continues, “But to seize this opportunity, the new Prime Minister must deliver on her promises. This starts with IR35. Ms Truss has said she will review the IR35 rules, which are flawed and create big problems not just for contractors but also for the businesses engaging them. An independent review of IR35 that results in change must be prioritised – that is if the new Prime Minister genuinely wants to unlock the full potential of the flexible workforce.”
Truss must delve deeper
“Throughout her campaign, Liz Truss has highlighted her commitment to reviewing IR35 and delving deeper into the loan charge scandal and whilst all this is very relevant and valid these are historic situations,” says Crawford Temple, CEO of Professional Passport, an independent assessor of payment intermediary compliance.
“We want to see her leading the way to bring government bodies like HMRC and The Treasury into the twenty-first century so that they can truly start to address issues like the disguised remuneration schemes and tax avoidance schemes that are harming the UK economy,” says Temple.
Temple suggests Truss could start by working more closely with compliance bodies, but when large umbrella companies start to call the shots over the compliance bodies, that could be heading down a dangerous path.
What more contractors probably agree with is Temple’s take on HMRC being “woefully inadequate” in stamping out dodgy schemes. Temple urges that as we face a cost-of-living crisis, an energy crisis and a real recession this will create a “perfect storm” for contractors to be tempted into schemes that are still being allowed to thrive and put workers into real financial hardship in the long run.
“Boris Johnson stood by and Liz Truss must now act,” says Temple of IR35 Reviews and the Loan Charge.
The current political system simply does not work for the people.Adrian Kidd, a Chartered Wealth Manager at EQ Financial Planning
Some believe the current political system isn’t working. One such person is Adrian Kidd, a Chartered Wealth Manager at EQ Financial Planning.
“Ultimately, the outcome of this vote doesn’t matter,” says Kidd. “The current political system simply does not work for the people. If it did, we’d forsake vanity projects like faster trains to Birmingham and more lanes on motorways and make sure that all people in the UK had a reasonable standard of living.”
Kidd is worried that whoever the leader is, they will “misspend our capital and not solve any issues that really matter”. However, he is hoping to be proven wrong.
“They have a great place to start right now with winter coming. We need a leader to make tough decisions, but one that will also help with the cost of living currently, and work for the many and not the few. The people who are really hurting do not care about better roads or faster trains, as they cannot afford to use them.”