Lib Dems call for new employment status tests

New legal tests to establish the employment status of workers should be drawn up, alongside the ‘dependent contractor’ category proposed by the Taylor Review, the Liberal Democrats say.

Based on factors like “the degree of employer control”, or thresholds on hours or income, the tests would let users get placed above or below them to determine their status, the party said.

But more in line with what the freelancer sector says it wants (the Business Entity Tests were attacked and binned, and the IR35 digital tool is already under fire), the Lib Dems also wish to define self-employment.

Gathered at their Bournemouth conference, Vince Cable’s party passed a motion towards “updating the current legal definition of self-employment” to ensure it reflects “the 21st century economy and modern technology.”

The same reasoning is why it wants the UK to introduce the ‘dependent contractor’ status and Matthew Taylor’s other recommendations, which the party said it endorses, “broadly.”

In a statement sounding like it could have been plucked from the review, the Lib Dems acknowledged that self-employment “often acts as a springboard to more ambitious forms of entrepreneurship”.

Another acknowledgement that freelancers will likely welcome is that, “according to surveys, the self-employed…get as much if not more job satisfaction than employees.”

Other reforms the party wants to make, with potential impact on freelancers and contractors, relate to:

Small Business Taxation

The ‘Change Britain's Future’ manifesto spoke of reforming the corporation tax system so that it benefits the smallest companies. The party’s leader appointed since then is sympathetic to the idea of taxing businesses based on their turnover. According to the Chartered Institute of Taxation, Mr Cable told the conference that there is “a need to shift some tax onto turnover or cashflow.” The institute understands that a group of business people have been commissioned to draw up potential policy.

Government policy

As a former member, the Lib Dems naturally defend the previous coalition government’s decision to cut the corporation tax rate to 20%. However, they regard further cuts as the wrong priority.

Elsewhere in taxation, but relating to the taxation of individuals, they appear to be positioned between the Labour party’s plans for substantial tax increases, and the Conservative party’ plans for further tax cuts.


Appearing on the latest edition of BBC1’s Question Time, Mr Cable said he opposed a re-run of the EU referendum. However, his party is calling for an "exit from Brexit" referendum to be held once the outcome of the UK-EU negotiations is known. If held, the public would get to choose between "the deal" proposed for Britain’s EU exit, or Britain remaining a full member of the EU.


27th September 2017

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