What will a new Labour government change for freelancers?
Last Updated on 2 November 2024
I’ve been training freelancers for so long now that I can remember being freelance under a previous Labour government!
So does a change of governing party make a difference to self-employed people? Well – yes, if my experience is anything to go by.
It’s been fun looking back over nearly 20 years and finding a blog post explaining Gordon Brown’s tax plans. It feels like a different universe.
20 years ago there were grants for new sole traders, free booklets, and free business support.
I remember in 2005 a free business advisor buying me a cappuccino in Coffee Republic (remember them?!) and checking over the plans for my new training business.
That support all changed (and reduced) under Cameron and Osborne’s austerity programme. It was eventually replaced by the New Enterprise Allowance, which was then quietly abolished in its turn under Boris Johnson in 2022.
What are today’s big freelancing issues?
I’m writing this post just after the election on 4th July 2025, which Labour won by a so-called landslide. So let’s look at some current issues and think about how they might be fixed.
Update 17 July 2024: See this separate post about pension scheme legislation >
1/ Frozen thresholds
It’s become harder to run a small limited company, as George Osborne invented dividend taxes, and successive Chancellors have increased them substantially.
Conversely it’s less bureaucratic to become a small sole trader business than it used to be. But lots of financial thresholds have been frozen for years.
For example you don’t have to register as a sole trader until you hit more than £1000 from self-employed activity in a tax year. This relatively new innovation is great for PAYE freelancers who do a bit of self-employment on the side.
But that ‘trading allowance’ threshold of £1000 hasn’t gone up since 2017.
IPSE, the campaigning group for self-employed people, say it should be £5000 by now. Otherwise more and more people are dragged into having to register and fill in tax returns each year.
This is very similar to the freezing of income tax thresholds. It means as costs and earnings increase, more people are dragged into paying tax at higher rates.
At time of writing the new government has no plans to change tax thresholds. It was even part of their manifesto commitment, as they didn’t want to be seen to be profligate.
David’s guess
Likelihood of change: 3/10
Maybe some tinkering. Don’t hold your breath.
Update 31/10/24: In her first Budget as Chancellor, Rachel Reeves announced thresholds might go up with inflation again from 2028-29.
Defining a ‘business’
You might have heard of ‘IR35’ rules, which have been changed a number of times since 2017. (See this blog for the details.). IR35 is the way the HMRC tries to define genuine businesses from people who behave like an employee.
This whole area is a mess. It exists because employees generate more tax for the treasury than people who are paid as a small business. But it’s so complex that HMRC often misunderstands its own rules.
If the new government solves this one it will be very popular amongst lots of self-employed freelancers, contractors and consultants, as well as the people in hiring organisations who have to do all the paperwork.
There is a possibility the new government might reinstate the Office of Tax Simplification as part of the new approach to workers’ rights.
The Labour manifesto has a whole section about small business and the self-employed. It also says:
“Britain’s outdated employment laws are not fit for the modern economy…”
…and cites Labour’s Plan to Make Work Pay
David’s guess
Likelihood of IR35 change: 2/10
Likelihood of other change: 8/10
They’ll certainly try, as they’ve promised that already.
Vibes
If you’re reading this you probably work in TV, film, theatre or other creative arts. You are my tribe!
I have hopes that for all of us the conversation around this important area of the economy will be more positive.
We have a new government that understands the importance of culture. Taking one example, Keir Starmer used to be a musician and still plays football.
The new Culture Secretary Lisa Nandy is on record as wanting a ‘softer’ Brexit. She should therefore be more open to the idea of reducing the challenges facing touring musicians and other UK freelancers working temporarily in EU countries.
There’s also been a lot of talk from government about the need for respect and stability, which can only be good for people who jump from job to job and feel their work is precarious.
The manifesto talks specifically about helping small businesses to get paid on time.
Who knows where all this will go, but at least the vibes for us creatives are better than they have been for more than a decade. Whole paragraphs in the manifesto talk about access to arts and culture.
I’m writing this as England men’s team has just qualified for the final of the Euros. Here’s a quote from the manifesto…
“Labour is committed to making Britain the best place in the world to be a football fan.”
Job done??
David’s guess
Likelihood of change: 9/10
When will we know something?
On the money side of things, Rachel Reeves, the new Chancellor, says wait for the Autumn Statement.
Meanwhile, if I spot anything new that affects freelancers, I’ll let you know.
We’ve got five years, folks. Strap in for the ride.
NB: David Thomas Media Ltd is not responsible for the content of other sites nor any financial advice provided by them.
Posted on 12 July 2024
Thank you for this update, David! It’s very helpful.