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IR35 Changes Causing Concern

Another day, another IR35 bombshell that will shock nobody bar HMRC (probably). A new survey conducted by Robert Half has found that more than three in five senior decision makers are either very concerned or somewhat concerned that IR35 changes, due in April next year, will make it hard for them to attract temporary workers. 

So, let’s reiterate. The majority of decision marketing in big and medium sized companies believe that IR35 is going to negatively impact their business. However, we choose to say it, it hardly makes for great reading, does it? 

The survey questioned 398 medium to large sized UK businesses about the impact that they thought IR35 may have for them. The concern they have isn’t limited to attracting new contractors either. Nearly half are also concerned about the possibility of losing contractors that they already have working for them. 

HMRC believes that up to 90% of independent contractor companies are not complying with IR35 off-payroll working rules. The new legislation will mean that many contractors will need to renegotiate their existing contracts if they fall within IR35 statutes, to ensure that they are not financially compromised by the new tax pressures that HMRC are looking to exert on them. However, only 15% of employers say that they are willing to pay better rates to keep their existing contractors, or secure new ones. 

This is at a time in the world economy where the need for contractors, and the desires of people to work for themselves is ever increasing and leaves the whole thing …well, for want of a better way of saying it…in a right bloody mess.

As more and more business and independent bodies are calling on the government to pause and review IR35 legislation, last month, Contactor UK rallied the troops by writing to all MPS asking them to oppose the imminent IR35 changes and to vote against it being included in any finance bill. They also asked them to propose HMRC looks for a fairer system for contactors and to suspend any activity around the Loan Charge. 

So that leaves things just about as clear as they have always been… meaning it’s still an absolute minefield, nobody has a clue what’s going to happen when the laws finally pass and if there’s a chance it may actually get a last-gasp reverse in Parliament. 

Remind you of anything???

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