As the IR35 consultation into private sector reform closed at the end of last week, IR35 specialist, Qdos Contractor, has called on the government to consider the wider implications that reform could have on the entire UK economy, which already faces challenges due to Brexit uncertainty. In the IR35 consultation, the government promised to review the impact of last year’s public sector changes which, if extended to the private sector, would see 5.7 million businesses responsible for determining contractors’ IR35 status and liable for any incorrect decisions.
“With the IR35 consultation drawing to a close, it’s vital the government carefully examines the wider implications of further changes, because reform - should it mirror the public sector - has the potential to impact the entire UK economy,” Qdos Contractor CEO, Seb Maley said. "Amid Brexit uncertainty, independent contractors and the flexible labour market are essential to the competitive economy we need. It’s time the government looked to protect it.”
Maley noted that since the public sector reform, contractors are continuing to be wrongly placed inside IR35 – a mistake which risks the liability of the businesses engaging these workers and sees contractors pay similar taxes to employees without receiving any employment rights.
“To extend reform when the dust clearly hasn’t settled on public sector changes would be short-sighted,” he said. “The government must prioritise sorting the chaos caused by public sector reform before announcing private sector changes. And in any case, further reform would break the government’s promise to support small businesses.
“Should the Government press on with changes and with it, perhaps lose the support of contractors altogether, a 2019 roll-out would be premature. Engagers must be given time to equip themselves with the skills and experience needed to make accurate IR35 decisions on a huge scale.”
Previous Qdos Contractor research into 1500 + independent workers revealed: