IPSE concerned by IR35 research

(3 minutes to read)

With the IR35 consultation closing at the end of May, research covering the legislation has revealed worrying results.

The Association of Independent Professionals and the Self-Employed (IPSE) has responded to latest research concerning the IR35 legislation.

According to Qdos figures, as many as 92% of UK contractors are yet to be contacted by either their client or recruitment agency to discuss next year’s IR35 reform; only eight per cent have had communication.

Brookson Legal found that worrying, 59% of UK firms are planning to take a blanket approach to IR35 assessments when it is extended to the private sector.

Further findings from both companies show:

  • 48% of UK businesses would reduce the number of contractors they hire because of the changing rules.
  • 86% of contractors would challenge ‘inside IR35’ decisions made by their clients – 14% wouldn’t.
  • Just 14% of contractors have faith in clients and agencies to make accurate IR35 decisions – 34% are undecided and 52% don’t think these parties can manage the changes.

Andy Chamberlain, IPSE’s Deputy Director of Policy, said, “This research demonstrates exactly how big a mountain UK business has to climb to catch up with the off-payroll rules. There is a very real risk that contracting, which is a proven driver of innovation and productivity, will be pushed into decline in the UK at the time that it is needed most.

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“It is no surprise that clients haven’t spoken to their contractors about these impending changes, they simply don’t know what the new rules will be. We are all waiting to see the draft legislation and that won’t be published until July at the earliest. What we have seen so far is too complex, totally unfit for purpose, and with so many variables that haven’t been decided.”

He added, “I am at a loss how businesses are expected put processes in place in less than a year when HMRC fails to make correct determinations after 20 years. April 2020 is an unrealistic deadline – implementation should be delayed for at least another year.

“That a majority of firms are planning a blanket approach to IR35 assessments, is deeply alarming – and in direct contravention of the government’s stated intention. The government needs to hit the pause button. It cannot push ahead with the reform while there are clear indications that businesses will not be able to comply with the new rules.”

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