November’s Member Meet-Up: Reviewing the impact of IR35 changes

In our latest IPSE Member Meet-Up on the impact of IR35 changes in the private sector, members reflected on IPSE’s latest research into the impact of IR35 and shared how the changes are impacting on their freelance businesses.

The meeting facilitated discussion on IPSE’s latest research findings, with members often sharing their own similar experiences of financial challenge, conflicts around status determinations, use of the CEST tool and provision of Status Determination Statements.

With IPSE due to give evidence to the House of Lords Finance Bill Sub-Committee (6 December 2021) as part of their follow-up inquiry into the IR35 reforms in the private sector, the shared experiences of members will be fed back to the inquiry.

Reflecting on latest IR35 research

The discussion initially focused on IPSE’s latest research on the impact of IR35 reforms, with members keen to share how the findings compared to their own experiences.

There were reports that clients within the banking and financial services sectors had introduced blanket assessments of inside IR35 and blanket bans on contractors operating through their own limited companies. This closely aligns with the research findings which revealed that 21 per cent of freelancers reported that their client had simply assessed all engagements as inside IR35 whilst a further 11 per cent reported that their client had moved them onto a payroll without assessing the IR35 status of the engagement.

In particular, members operating in these sectors expressed frustrations over the fact that large clients had adopted these approaches with contractors back in February 2020 and had not changed this approach when the delay to the implementation of the rules was announced due to the pandemic. Instead, these large clients often referred to the imposition of blanket bans and blanket assessments as a business decision – when this clearly was not the case.

Umbrella company and outside IR35 experiences

For other members, now operating via an umbrella company as is the case with 34 per cent of the freelance workforce, the expectation that contractors will now have to cover the liability of Employer’s NI and where applicable, the Apprenticeship Levy, was seen as extremely unreasonable. In addition, these members also cited the fact that these deductions were often taking place after the negotiation of agreed rates.

On a more positive note, one member recounted their experience of using IPSE’s outside IR35 template contract to successfully achieve an outside IR35 role – closely reflecting our research which showed that 51 per cent of freelancers are currently working on contracts which have been deemed outside IR35.

Get involved

IPSE Member Meet-Ups run on the last Thursday of each month and allow members to discuss and learn from each other’s experiences, but also inform our policies, research work and more.

Spaces are limited to 30 to keep the sessions manageable, so if you’re interested in joining we recommend signing up early. Keep an eye out for an email about next month’s – coming soon.

Meet the author

Joshua Toovey

Policy and research officer