The Conservative Party has announced plans to replace IR35, a set of tax rules that affect self-employed people, if it returns to government. The announcement was made by shadow chancellor Andrew Griffith in a speech at a college in north London.

IR35 rules are designed to prevent tax avoidance by determining whether a worker is genuinely self-employed or should be treated as an employee for tax purposes. Griffith said the rules have let down many self-employed people by limiting their ability to choose their status and burdening them with compliance.

Under the Conservative plan, IR35 would be replaced with a new system that respects the right of the self-employed to choose their status while preventing actual abuse. Griffith also said he wants to cut the amount of tax paperwork small businesses must complete.

To explore reforms to the tax compliance system, Griffith has commissioned a taskforce led by Conservative peer Lord Mackinlay of Richborough and Robert Colvile, outgoing director of the Centre for Policy Studies think tank.

The Federation of Small Businesses has previously estimated that small businesses face a combined cost of £25 billion a year due to tax compliance, with owners spending 44 hours annually on tax paperwork.

Griffith also urged the government to rule out tax rises at the autumn Budget, warning that taxes and the fear of taxes are driving high-net-worth individuals to leave the country, reducing tax revenues for public services.