For two decades, IPSE has been the voice of contractors in the campaign against IR35, using our presence in Westminster and the press to highlight the impact of these damaging rules. To do this, IPSE regularly conducts and publishes its own research into IR35.
This week, we have put a brand-new survey into the field – our Annual IR35 Survey; you can take part in the survey on our website – but first, I would like to explain what makes this research different from our previous work, why it’s important, and why you should take part.
Since the extension of the off-payroll working reforms to the private sector in April 2021, our research focus pivoted towards measuring the real-world impact of the reforms, ensuring HMRC couldn’t get away with sweeping IR35’s flaws under the rug.
This is exactly what we achieved with our ‘Taking Stock’ report in October 2021, which confirmed many of our prior predictions; that many contractors would be prompted to leave self-employment, stop working or even retire as a result of the reforms.
It also exposed huge issues in how clients approached the IR35 determination process; six months on from the reforms, one in five (21%) contractors we surveyed reported being subject to a blanket inside IR35 determination; a further 11 per cent were moved onto a payroll without an assessment by their client; and two in five (38%) reported that their client hadn’t provided a Status Determination Statement.
Similarly, our research into the attitudes of umbrella company contractors corroborated an awkward truth about the growth of umbrella company payrolls – that very many of these new joiners were not there by choice, but because their client had insisted upon it in response to IR35 reforms.
In fact, more than two thirds (69%) of respondents told us that this was the reason they were working via an umbrella company at the time. Of those, three quarters reported being dissatisfied with the arrangement, and 70 per cent said they felt they had lost their independence at work as a result.
With labour shortages and economic inactivity being such topical issues today, provoking such negative perceptions of one’s working arrangements feels like the last thing government should be doing.
IPSE’s campaigning against the off-payroll rules has seen us invited before parliamentary select committees and radio show hosts to explain the findings of our research; and notwithstanding wider turmoil surrounding the mini-Budget, it even helped win the argument.
But nearly two years on, the dust has firmly settled around the private sector reforms. That means our research focus needs to change. The research will now switch from highlighting the immediate impact on contractors to instead tracking the long-term damage of these reforms to both contractors and clients alike – and ultimately reminding government that opposition to the legislation is not going away.
This is exactly what IPSE aims to do with the launch of its new annual IR35 survey. Put into the field for the first time this week, the survey will track key metrics related to IR35, including the ways contractors work, their client’s approach to the rules and the success rate of contractor’s appeals against their client’s determinations.
Over time, this work will set out the reality of IR35’s long-term impact on the contractor sector and – we suspect – demonstrate the need for government to take a fresh look at how these rules work in practice and break free from its current path dependent approach.
We’re aiming for this research to become the leading source of insight into IR35, capturing industry, media and political attention – but to do that we need your help.
If you’re a contractor affected by IR35 – whether you work outside or inside IR35, or both – you can shape the outcome of this research by completing the survey on our website in fewer than 7 minutes. We’re also interested to hear from contractors not currently working – perhaps after being forced to retire or take a break from work due to the impact of the reforms.
Having only launched the survey yesterday, we’re really pleased with the level of participation we’ve seen so far. But the more respondents this survey gets, the stronger an asset it will be – not just for contractors seeking an insight into the latest hiring trends, but in efforts to counter the narrative from government that these rules are working as they should.
For help with IR35, check our advice pages for practical guides on how to navigate the legislation; and if you missed yesterday’s IPSE webinar ‘IR35, Managed Service Companies and the year ahead’, members will be able to access a recording of the webinar via our website in the coming days.
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