Many contractors say they’ll stop working in the UK due to IR35 changes

As many as 32% of contractors have said they will stop working in the UK because of the new IR35 private sector rules set to come into play in April.

The research, compiled by the IPSE, revealed that 13% of contractors plan to find contracts abroad, 11% are looking to stop working or retire early and eight per cent will move into permanent employment.

Of those surveyed, 92% said that working inside IR35 and having to pay National Insurance Contributions without employee rights is unfair.

With regards to their clients, 39% of contractors said their clients will stop using outside-IR35 contractors, looking to either make blanket-assessments that they’re all inside IR35 (20%), engage them through umbrella companies (14%) move their contractors onto PAYE (13%) or stop using contractors altogether (11%).

Andy Chamberlain, Deputy Director of Policy and External Affairs at IPSE, said, “This survey shows that the changes to IR35 are a clear and imminent danger to the self-employed sector and the businesses they work with right across the UK.

“Two out of five freelancers say their clients are not planning to continue using outside-IR35 contractors and many have already begun laying off their contractor workforce. It is unsurprising, therefore, that almost all freelancers say they are worried about these changes.”

Chamberlain added, “Nearly a third of freelancers have said they plan to stop contracting in the UK – and many more are likely to follow if they can’t find contracts that aren’t affected by the changes. We need to be clear: this will do enormous damage to this £305bn-a-year sector, which will have disastrous consequences for the wider economy.

“Businesses and contractors are simply not ready for the ill-planned and hugely disruptive changes to IR35. Many businesses have not even decided how to respond yet – and many more are planning to break the rules of the legislation by assessing all their contractors as “inside IR35”.

“The government must urgently delay the changes while a full and independent review is carried out. If it pushes ahead regardless, it will do untold damage to freelancers, the businesses that rely on them and the wider economy.”

To find out more about contracting please contact Sophie on 01442 795 100 or email sophie.lewis@contractoumbrella.com.