Recent changes to IR35 'undermine the self-employed', says IPSE

07.05.2021
The Marketing Team
Tax

The Association of Independent Professionals and the Self-Employed (IPSE) has stated that the recent changes to the rules relating to off-payroll workers, commonly known as IR35, 'undermine the self-employed at the worst possible time'.

The changes to IR35 took effect on 6 April 2021 and shifted responsibility for making the decision on employment status on each contract away from contractors and personal service companies (PSCs) and on to the client receiving their services. This has already been done in the public sector.

Research carried out by IPSE found that 50% of contractors planned to stop contracting in the UK once the changes took effect unless they could secure contracts unaffected by them. 24% are planning to seek contracts abroad; 12% plan to stop working altogether; 17% will seek an employed role; and 11% are looking to retire within the next year.

Additionally, 24% of contractors said their clients are planning to blanket-assess all their contractors as 'inside IR35'.  

Andy Chamberlain, Director of Policy at IPSE, said:

'The changes to IR35 would do serious harm to the self-employed sector at the best of times, but now they are adding drastic, unnecessary damage to the financial carnage of the pandemic – undermining the UK's contractors at the worst possible time.

'The crucial problem with IR35 is still its complexity: in fact, it is so complex that HMRC has lost the majority of tribunals on its own legislation. And there remains serious doubts about the CEST tool HMRC designed to supposedly cut through this complexity.'

If you could benefit from speaking to an adviser

Wide-ranging tax planning and compliance services for individuals seeking advice and guidance from our team of experienced and highly qualified professionals.

Friendly and coherent advice and guidance on accounting and tax matters for small business owners including those starting out for the first time.

Established businesses requiring accounting and tax compliance services, forward thinking tax planning advice and the support to help your business succeed.

Our full range of enhanced corporate services aimed at large companies and those requiring audit, assurance, corporate tax advisory and diverse tax planning services.

Glossary

Test

This is a test definition

more