Stay of execution on IR35 is welcome news


The IPSE staff, and no doubt quite a few members, were paying close attention today as Chancellor Hammond stood to give his Budget speech. As he sat down an hour later, there was a collective sigh of relief. There had been no mention of IR35, nor ‘off-payroll working’, nor ‘reform of the intermediaries legislation’, nor any other terminology which would indicate what we’d all feared: the extension to the private sector, of the unfair and deeply damaging rules which have plagued the public sector since April. But there was something in the Red Book.

The Budget document only becomes available once the speech has finished. A quick scan revealed IR35 hadn’t been completely forgotten, but it been kicked down the road. The government will consult on private sector non-compliance with IR35, but it will also consider the impact on the public sector, something IPSE has been calling for. Were it not for the concerted efforts of my colleagues at IPSE, and our extremely motivated members, it could have been a very different story.

Sometime next year the government will publish ‘external research’ into the effects of the new rules on the public sector. There is no explicit timescale provided for when we will see the consultation, but we might reasonably expect it to come around the same time. So 2018 is likely to see businesses large and small making their representations on why this measure would be disastrous. If the external research is thorough, it will highlight the damaging impact on the public sector, and therefore back-up the concerns of the private sector.

It’s not ideal, but it’s about as good as could have been expected. We had feared an automatic roll-out to the private sector, effective from April 2018 - that didn’t happen. We might have been reeling from a clear signal from Hammond that the government will clamp-down on disguised employment - that didn’t happen either. Instead, HM Treasury has conceded that it must carefully consider the consequences of changing the private rules.

Of course this doesn’t mean the problem has gone away. Far from it. IPSE will have to carefully hone its arguments, build alliances with other affected stakeholders and collect evidence to give government sufficient pause for thought. But it does mean we live to fight another day. And that at least is something to be grateful for.

Meet the author

Andy Chamberlain

Deputy Director of Policy and External Affairs