Individuals impacted by incoming IR35 reform have had their say on unpopular changes to the legislation, with half of contractors stating they will only continue working this way if they can find projects to which the off-payroll working rules do not apply.
According to IR35-lobbying body, IPSE, that surveyed its members, the potential impact of reform is so great that it could halve the size of the UK’s independent workforce. In addition to the one in two contractors who will quit if they cannot find outside IR35 opportunities, 32% will stop contracting in the UK regardless. Of this figure, 13% have said they will source contracts abroad, while 11% expect to stop working altogether or retire early. The remaining 8% are considering a move into permanent employment.
Judging by this survey, contractors’ plans will be largely dictated by how their clients react to private sector IR35 reform, which is to be enforced on 6th April and will see medium and large businesses start administering the rules.
When focusing on how businesses might manage the changes, 39% of contractors have said their clients will no longer engage contractors outside IR35 full stop. 20% explained their engager will make blanket inside IR35 decisions, which are not compliant given they lack ‘reasonable care.’ 14% of independent workers have been told they must work through an umbrella company where the IR35 rules do not apply. 13% of contractors are expected to go PAYE, while 11% of freelancers who do not think they will be able to work outside IR35 from April onwards have predicted that their client will ban independent workers entirely.
Unsurprisingly, nearly all of the contractors surveyed (97%) said they are either fairly or very concerned about reform to IR35 in the private sector. The vast majority (92%) are also of the view that working inside IR35 and paying employment taxes but not receiving employment rights in return is unfair.
You can read IPSE’s report ‘IR35 in the private sector’ in full by visiting the association’s website here.