Independent research on IR35 reforms will need to be challenged

At the IR35 Forum in December, HMRC explained independent research will be published regarding the impact of the April 2017 reforms. We don’t know when it will be published, but it seems likely it will be quickly followed by a consultation on extending the reforms to the private sector.

In other words, we don’t expect the research will lay bare all the problems that we know have been caused by the legislation because that would scupper the Government’s plans to push the reforms out further.

The Government doesn’t see, or doesn’t want to see, the problems that in fact have been caused by its own legislation. It claims there is no evidence of these problems. And because there is no evidence, there is no compelling reason not to push ahead with private sector reform too. Or so goes government logic, and it would be surprising if its commissioned research throws a spanner in that logic.

Yet, we know the rollout in the public sector has been catastrophic, not just for individual contractors, but for public authorities. The British Medical Association has described IR35 as an administrative nightmare for the NHS; there have been reported delays to public sector projects; and we at IPSE have heard, on a daily basis, the anecdotal reports from our members of disruption to their businesses and their clients.

So, we must try to uncover the evidence. To make it empirical, rather than just anecdotal. To make it irrefutable. It’s not easy. While we can point to NHS waiting times, or poor standards of public services, it’s difficult to categorically prove that IR35 is to blame, even though we know it is.

That’s why we have launched a survey, in conjunction with the Chartered Institute of Personnel and Development (CIPD). If you’ve been affected by the public sector IR35 reforms, and you haven’t yet taken it, please do. It will help us to demonstrate the unintended, harmful consequences of the legislation.

We also need to make the economic case. At a time when the UK is negotiating our future relationship with the EU, it’s madness that Government should seek to hinder our flexible labour market - one of our greatest competitive advantages. Rather than punishing the self-employed, the Government should support this highly-skilled and productive sector who contribute £255 billion to the UK economy – enough to fund the aforementioned NHS, twice over!

IPSE was staunchly opposed to the April 2017 reforms, and we will vehemently oppose any potential rollout to the private sector. We will work closely with other organisations – such as the CBI, who have now been confirmed as a member of the IR35 forum – to highlight the problems caused by the legislation. But you will need help from you, our members, to challenge the Government view that there has been no negative impact the public sector. Once again, thank you for your help.

 

Meet the author

Andy Chamberlain

Deputy Director of Policy and External Affairs