Contractors write-off IR35 reform as ‘unmanageable’

Experts are wrong to say that reform of IR35 in the private sector is manageable, the lion’s share of PSC contractors insist.

In fact, 61 per cent of limited company contractors have warned that further changes to the Intermediaries legislation would be “unmanageable”.

This majority vote of ‘no confidence’ in last year’s changes to IR35 being successfully introduced in the private sector goes against assurances that such reform could succeed.

Sounded by Qdos, which polled 1440 contractors on their fears, its assurances were repeated yesterday, as it said reform could work -- if clients and agencies “begin preparations now.”

But the 61% of doubting PSCs are actually saying reform wouldn't be manageable for them – professionally, regardless of whether other parties can put management processes in place.

So the finding, in effect, means that 61% of contractors do no believe they would be able to continue working outside IR35 in the private sector, should the April 2017 framework apply.

Yet this is not necessarily because they think their working practices are caught by the legislation, but rather because they think their clients will be too risk-averse to find out.

“Last year's reform has not been forgotten, where large numbers of contractors were placed inside IR35 by their public sector client -- simply in an attempt to protect liability.

“Many contractors do not envisage the private sector being any different,” Qdos’ chief executive Seb Maley said in a statement to ContractorUK.

“Working under IR35 and without any employment rights is not an attractive financial option for many contractors who, quite understandably, could be prepared to stop working on projects should their client set their status to inside.”

Also when asked in the poll, 74 per cent of the PSCs said they did not believe agencies, and clients (who would decide on IR35 status), are equipped to make accurate IR35 decisions.

Maley said: “Such concern [from contractors] sends a message to private sector engagers that unless they equip themselves for reform, they risk losing the contractors they clearly rely on.”