Government’s “anti-business” IR35 consultation a fatal blow to Britain’s flexible economy

The Government has today released a consultation around off-payroll working rules – known as IR35 – and extending them to the private sector.

Chris Bryce, IPSE CEO, responds: “For the Government to even consider introducing the ill-judged changes to IR35 in the public sector to the private sector before their full impact can be truly analysed is outrageous.

“It would be a fatal blow to the UK’s flexible economy.

“IPSE’s research – which suggests large numbers of contractors are walking away from the public sector, with a particularly bad effect on the NHS – paints a very different picture from the Government’s report.

“It is shameful that the Government did not publish the external research into the impacts of the public sector changes prior to announcing this consultation.

“Undermining confidence in our flexible, self-employed workforce is the last thing the Government should be doing at this time of great uncertainty over Brexit.

“How can the Government hold this anti-business consultation when it won’t even know the full tax implications of the changes made last year until people file their tax returns in January 2019?

“Furthermore, the consultation itself is based on flawed assumptions.

“The Government is kidding itself if it thinks HMRC’s online tool – which it encourages people to use to determine their IR35 status – can be relied upon.

“Just yesterday, an IT contractor successfully argued in court that HMRC had incorrectly determined that he was caught by IR35.

“If HMRC, with all its resources and expertise, cannot make an accurate IR35 determination, how can it expect anyone else to get it right?

“IR35 is so complex, not even HMRC can accurately determine who it applies to.

“Now they want to shove that impossible task on to UK businesses. For the sake of our economy, IPSE will fight this proposal all the way.”