IPSE: ‘Myopic’ IR35 extension will ‘hamstring’ UK businesses

The government’s decision to push ahead with the extension of IR35 into the private sector will do serious harm to freelancers, the businesses that use them and the wider economy, IPSE has warned.

IPSE commented after the government launched its consultation on the reforms this morning. It will be submitting evidence to the consultation warning about the dire risks of the changes to IR35.

IPSE’s Deputy Director of Policy Andy Chamberlain commented: “This is an astonishingly myopic move. The UK’s greatest competitive advantage is its flexible labour market. This proposal will dramatically restrict that flexibility and starve UK businesses of the freelance talent they need to get work done.

“Pushing ahead with this during Brexit will hamstring freelancers and their clients when the country needs them most.

“HMRC has claimed pushing these changes into the public sector generated £550 million, but this is at the cost of far-reaching long-term damage.

“In the NHS, TfL and right across the public sector, the changes led to mass contractor walkouts, causing disruption, staff shortages and even the cancellation of major projects.

“Brexit uncertainty has already driven freelancers’ confidence to an all-time low: the last thing they need now is heavy-handed legislation suffocating their sector.

“IPSE, the CBI and numerous other business bodies have already warned about the dire risks of the reforms – and we will do so again in this consultation. The government should finally open its ears to the experts and scrap the dangerous reforms to IR35 once and for all.”