70 per cent of contractors believe private companies will lose out.
IR35 reform will damage industry.
Umbrella company, Parasol’s annual contractor barometer has shown the degree of apprehension surrounding the proposed government changes to IR35. The study found that 72 per cent of contractors believe private companies will be denied access to vital skills because of the upcoming changes. With just two months to go, almost 45 per cent of contractors remain unsure if working via a limited company or an umbrella company would be best for them.
Seven in every ten contractors (72 per cent) believe that UK private companies will ultimately lose out when proposed IR35 reforms come into play this April by missing out on access to skilled and highly sought after workers.
Parasol surveyed more than 1,400 contractors, working across industries including IT, financial services and engineering. The survey was launched in advance of the implementation of the changes, which are due to come into force from April 2020.
The results also showed that almost half (45 per cent) of all contractors were unsure whether working via a limited company would still be the best solution for them post-IR35, with many considering other options such as joining an umbrella company.
Worryingly, with less than three months before the national rollout which impacts an estimated 3.9million contractors in the private sector, more than one in five (21 per cent) admitted to knowing nothing about the upcoming changes.
“Our survey provides some interesting insights into the attitudes and opinions of UK contractors and highlights some notable concerns ahead of the proposed IR35 changes,” said Clarke Bowles, head of key accounts at Parasol. “One of the key issues around the changes is a lack of understanding of what the new rules will mean in practice. Our study highlighted confusion from UK contractors, but we also know from the recruitment firms and agencies we work with every day how they too have struggled to understand what their responsibilities are with end-clients to manage compliance effectively.”
The survey also found that the majority of contractors (40 per cent) would look to their accountant for help determining the IR35 status of a contract. This was followed by 25 per cent who would go to their agency and 11 per cent who would speak to the end-client. Nine per cent used a third party legal advisor and just seven per cent opted for the government’s CEST tool.[