Update on IR35 reforms being repealed

Government announced that controversial IR35 reforms are staying

We have had quite the rollercoaster of a couple of weeks. IR35 is being repealed. Oh wait, no it is staying! The government have announced that the controversial IR35 reforms are staying. We had cautious hope for having an unworkable system for 2 decades repealed. Sense seemed to have prevailed, and things were indeed looking up. The situation has now taken a turn for the worse with a complete reversal by the government, sacking the chancellor, the pound taking a hit and the cabinet in uproar. All in the space of 2 weeks!

Responding to the announcement, Tania Bowers, Global Public Policy Director from the Association of Professional Staffing Companies (APSCo) expressed anger from the trade association:

“The Chancellor’s emergency statement has only served to add to the woes of the UK’s labour market. Every business across the UK has faced significant upheaval in the last two weeks where time and investment has quite frankly been wasted in addressing the initial plans out of the former Chancellor’s announcement.”

Government Chaos

The government is well aware of the problems caused by this damaging legislation. The previous Chancellor even said so! However, the decision has been made by the new chancellor to rip up those plans and go back on that promise. The government are making it more, not less difficult in complete contradiction of its plans to help more people become self-employed! This crippling indecision has left vast numbers of freelancers and contractors in limbo.

Bowers continues, “As the country continues to face significant struggles, having access to a flexible labour market is crucial. Following the roll out of IR35 into the private sector, we saw the country losing highly skilled contract professionals, as they faced no choice but to take a full-time role. Data from IPSE revealed that around 35% of contractors had left self-employment since Off Payroll rules came into effect.

This regulation is, absolutely, not fit for purpose for the flexible workforce of today. Businesses have faced a period of significant unrest in a Post-Brexit and Covid hit economy, so it is vital the country gets back on track. However, skills under-pin the success of this aim. If the country is to once again to become an economic powerhouse, it needs the available talent to achieve this.”

So, we end up right back where we started – with a system that simply DOES NOT WORK.

Further Reading

• What is IR35? What do you really know about IR35?
• R35 is being repealed