Home Business News Contractors concerned that IR35 rules will change again in the near future

Contractors concerned that IR35 rules will change again in the near future

by LLB Finance Reporter
9th Nov 21 12:15 pm

According to new research conducted by Cool Company, the UK’s contractors are concerned that there will be more uncertainty around IR35 regulations in the near future. 74% of those surveyed believed that the current rules will be revised. With 44% of those within the education sector, and 40% within HR and recruitment strongly believe that there is cause for concern. Only 10% believed that there would be no changes, and 16% of people across all industries had no opinion on the matter.

The reasons for the unease surrounding potential legislation changes aren’t just due to the potential complexities and confusion that could arise, but also the real cost implications. 86% of respondents sought specialist advice to prepare for IR35, spending an average of £764 on this advice. But the amount varied significantly by sector.

  • The industry which spent the most on IR35 advice was the charity and voluntary sector, with 81% of respondents spending an average of £1,081
  • 100% of contractors surveyed in the information and analysis sector sought advice, typically spending £616
  • 100% of contractors in law enforcement also sought advice, spending around £885
  • 95% of hospitality and event management respondents sought advice but spent the least at £506 on average

But given that only 43% of people agree that they understand the current IR35 legislation, it would seem any legislation changes are likely to incur further costs.

Of those who do feel secure in their understanding of the legislation, more than half (53%) come from the performing arts industry, and the HR and recruitment sector. While 29% of respondents from transport and logistics somewhat disagree that they understand IR35 legislation.

Of the 14% who feel they secure less work since the introduction of IR35 – this figure includes 100% of respondents in creative arts, environment and science, law enforcement and media and internet – more than half (58%) said that they only seek to secure work with clients deemed outside of IR35 legislation. And 54% said that clients are unwilling to engage with a complex assessment system.

However, not all of the consequences of IR35 have been negative. There is a general consensus that the new legislation makes it easier for contractors to find work. 55% of respondents said that they feel they can secure slightly more work since the introduction of IR35, while 23% feel they can secure a lot more work.

Cool Company’s Head of Business, Kris Simpson, comments: ‘By and large, IR35 is being viewed in a positive light by the contract workforce. Many have discovered the benefits of working with umbrella companies, and the majority have found it easier to secure work. But the prospect of legislation change is causing anxiety.

‘Any change in working practices carries the potential to disrupt workflow and incur costs. With many professionals working to a competitive margin, any additional costs could be damaging for many.’

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