
It’s a peculiar thing, isn’t it? The government is bending over backwards to grease the wheels for City fat cats, watering down market regulations in the name of economic growth. Yet, when it comes to the entrepreneurial backbone of this country — freelancers, contractors, and even self-employed financial advisers — they’re vilified, scrutinised, and hauled before tribunals like common criminals. If the government is so keen on promoting growth, perhaps they should start by examining their own policies. Let’s take a stroll down to 100 Parliament Street and have a word with HMRC about IR35.
The latest example of HMRC’s ham-fisted approach to tax policy comes courtesy of Bryan Robson, the former Manchester United and England captain. Robson, now in his 60s, has just lost part of an IR35 tribunal, leaving him saddled with a hefty tax bill. His crime? Acting as a global ambassador for Manchester United. He was paid a modest £150,000 every six months and required to attend at least 35 events. Apparently, this was enough for HMRC to deem him an employee for 16 months of his engagement.
Now, one might think that if someone’s been paid for their services, submitted invoices, and operated independently, they might actually be an independent contractor. But no, HMRC’s IR35 rules — a masterclass in bureaucratic absurdity — found otherwise. The concept of “deemed employment” strikes again, casting freelancers and contractors into a Kafkaesque nightmare of tax uncertainty.
Let’s not kid ourselves. IR35 isn’t about fairness or even clarity. It’s about squeezing every last penny from those who have the audacity to step outside the cosy confines of traditional employment. Rather than celebrating the entrepreneurial spirit of freelancers, HMRC treats them as though they’re operating some kind of tax-dodging racket. Heaven forbid someone should want to work for themselves!
The Robson case highlights the core issue: HMRC’s fixation on control. If a client sets expectations — like attending a certain number of events — HMRC gleefully wields this as evidence of employment. This interpretation ignores the reality of how freelance contracts often work. As Seb Maley of IR35 specialists Qdos rightly points out, watertight contracts are essential. But even the best-drafted agreements can crumble under the weight of HMRC’s nebulous “deemed employment” rules.
And it’s not just footballers who are caught in this mess. Self-employed financial advisers, many of whom work tirelessly to support their clients’ financial futures, are finding themselves in the crosshairs too. These individuals aren’t dodging taxes; they’re the lifeblood of local economies, offering invaluable services (selling products for the City fat cats) to families and small businesses. Yet the government seems intent on taxing them into submission while giving free rein to the big players in the City. Oh wait, that hasn't happened yet. Friends of fat cats aren't caught by "deemed employment" rules are they! How silly of me.
Meanwhile, the government’s growth agenda prioritises loosening regulations for financial markets. Why? To make it easier for the suits in the Square Mile to peddle their products and line their pockets. The hypocrisy is staggering. On one hand, they’re pressuring market regulators to “lighten the load” for the financial industry—a sector hardly renowned for its self-restraint. On the other hand, they’re hammering independent workers with punitive tax policies that stifle innovation and erode competitiveness.
Dave Chaplin of IR35 Shield sums it up perfectly: “The concept of ‘deemed employment’ has never been workable.” He goes on to highlight how the off-payroll legislation is a drag on UK business, impeding growth at precisely the moment the country needs it most. In other words, while the government preaches about growth and opportunity, their actions tell a different story: one of micromanagement, mistrust, and missed opportunities.
So here’s an idea for Rachel Reeves and her band of reformers: before you bend over backwards for the City, take a good, hard look at HMRC. Ask yourselves why your own policies are strangling the very people who drive economic growth. Instead of vilifying freelancers and contractors, why not create a tax system that recognises their contribution? Scrap IR35, or at the very least, make it fit for purpose. Stop treating independent workers like criminals and start supporting the entrepreneurial spirit that’s supposed to define this country.
If the government genuinely wants to boost growth, it’s time to get their house in order. They don’t need to look far; just down the street to 100 Parliament. The ball’s in their court. Let’s hope they don’t fumble it… again.
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