September’s Member Meet-Up: The impact of the changes to IR35 in the private sector

In our IPSE Member Meet-Up for September, members reflected on their experiences of navigating the changes to IR35 in the private sector, dealing with the imposition of blanket assessments or blanket bans and the importance of collaborating with end-clients when determing IR35 status.

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The meeting gave members the chance to share, network and hear about how industries up and down the country have been affected by the changes.

Finding work and status determinations

The discussion initially focused on whether members were still able to operate outside IR35, with over half – encouragingly – explaining how they have managed to continue operating outside IR35.

Despite being able to secure outside-IR35 roles in the short term, many said they were worried about being able to keep securing these opportunities in the long term and feared the supply could dry up.

For others, the changes to IR35 in the private sector have exacerbated problems in an already difficult year. Some people said finding work was already difficult because of the pandemic, but the changes made the situation much worse: and some were even considering stopping contracting in the UK.

Shortage of workers and paying Employers’ National Insurance

Another key concern was that the IR35 changes have led to a shortage of workers in industries such as IT, rail and telecoms, with many highly skilled contractors leaving for permanent employment or seeking contracts abroad.

Most notably, the changes to IR35 are a factor in the current HGV crisis – one of the many unintended consequences of the reforms.

We also heard how members are now having to cover Employers’ National Insurance liability and, where applicable, the Apprenticeship Levy when operating through an umbrella company. In almost all cases, this liability was covered through a reduction in day rates, while some reported that end-clients are now advertising at higher rates to factor in this extra cost.

This was particularly concerning for members given the planned increase of 1.25 per cent to Employers’ and Employees’ NI as part of the Health and Social Care Levy.

Another worry for some members that was discussed is that they can’t claim business expenses for travel and accommodation.

Tips on how to navigate the new rules

Members also shared their tips on how they have managed to stay outside IR35 since the changes, focusing on the importance of negotiating status determinations and advice – with one member recently joining IPSE specifically for advice on the new rules.

Another factor that emerged as key in securing outside-IR35 status is having control over your working hours and being able to use your own equipment or software.

Similarly, others reported that having good end clients could be just as important for securing outside-IR35 assessments. Some members reported clients who, instead of outsourcing IR35, communicated clearly with their contractors and sent their senior staff on IR35 training courses.

The meeting concluded with the hope that eventually end-clients will realise the importance of contractors and through greater collaboration, clarity and understanding, most contractors will be engaged in outside IR35 roles again.

Visit our IR35 News page to keep up with the latest updates, and you can find more support and useful information with our IR35 guide.

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

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Joshua Toovey

Senior Research and Policy Officer

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