Most contractors will never return to employment or go employed despite the uncertainty surrounding upcoming IR35 reforms in the public sector, new research suggests.
At least 50 per cent of contractors polled by 1947 UK contractors said they will never go employed, 46 per cent said they would consider and only four per cent said they would eventually go employed.
On April 6 2017, in the public sector only, IR35 status will be decided by the employer, not the contractor. This reform, announced by the Chancellor in last year’s Autumn Statement, means that contractors will be taxed at source if it’s deemed that IR35 does apply.
95 per cent of contractors believe the changes will reduce the benefits of working as self-employed.
The research also suggests that the IR35 changes will have a significant knock-on effect in the public sector should contractors’ self-employed status not remain. 85 per cent of contractors said they would stop working in the sector, switching to the private sector instead.
“That by and large, a telling proportion of UK contractors are confident enough to say they’d never go employed is positive news, in what ultimately is a period of uncertainty for the sector,” said Qdos Contractor’s Seb Maley.
“Understandably, contractors are feeling threatened by incoming IR35 changes, with many planning to stop working on public sector contracts should they be caught by the nhe new IR35 rules.
“With the right guidance and support though, the UK’s contractor workforce should be able to continue to benefit from working independently – and in the public sector – without the fear of wrongly being deemed inside IR35 by public sector clients.”