As speculation surrounding potential private sector IR35 reform gains momentum, 48% of UK contractors have revealed that it is currently their number one business concern.
While public sector bodies and recruitment agencies slowly get to grips with recent changes to IR35 in the public sector, rumours have surfaced to suggest that similar changes will be rolled out into the private sector before long.
New research carried out by contractor tax adviser, Qdos Contractor, has revealed that ongoing uncertainty around the long-term future of IR35 is in fact having a negative impact on UK contractors.
The survey, with 777 respondents concluded that just under half (48%) of contractors are most worried by the potential prospect of public sector IR35 reform, outstripping the 18% of contractors who fear increasing competition for contracts by a telling 30%.
17% of independent workers surveyed place the lack of support for the self-employed as their top business concern, while 10% revealed recent public sector IR35 reform is the biggest threat to their business. Just 7% listed other concerns such as Brexit, declining day-rates and issues surrounding scaling up as a business as their biggest worry.
That almost one in two independent workers have voiced mounting concern over the future of IR35 suggests clarity is needed, explained Qdos Contractor CEO, Seb Maley.
“While murmurs surrounding any changes to private sector IR35 remain rumours at this stage, we urge the Government to learn from previous mistakes and quickly end any confusion and uncertainty on the matter.
“Economically and socially speaking, freelancers and contractors are vital to the UK. They should not be left in the dark. Recent changes to public sector IR35 caused panic among contractors, public sector engagers and agencies. And while the dust has somewhat settled as hirers begin to get to grips with reform, a repeat performance in the private sector would not be wise.”
While private sector reform would be not be popular among contractors, the largest proportion (36%) would not be deterred from working independently, should speculated changes be confirmed. This should give the UK Government food for thought, stated Seb Maley.
“It does however speak volumes of UK contracting that the largest proportion of contractors would continue working this way regardless of any potential changes to private sector IR35. The vast majority of the UK’s independent workforce choose to work this way for the freedom and control it brings, rather than any tax advantages.”
The overriding message from leading industry voices is that potential reform to the private sector can in fact be managed. However, this hasn’t stopped 33% of contractors from revealing that they would consider going employed should private sector reform be announced. The remaining 31% suggested they would look into alternative careers, emigrate to contract overseas or even consider an early retirement.
“One third of contractors surveyed revealed they would consider employment if private sector IR35 reform is enforced. This sends a clear, strong signal to Government that reform to private sector IR35 should be avoided,” added Maley.
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