|The mini-Budget, which saw the beginning of the end of the then new Prime Minister, Liz Truss, promised to repeal the unpopular IR35 reforms. A couple of weeks and many U-turns later, a new Prime Minister and a new Chancellor repealed the proposed repeal. (see: Joy short lived as plans to scrap IR35 reforms are scrapped - Oct 2022, Shout99).
A recent survey by umbrella company, Cool Company, showed that 49 per cent of contractors were concerned that there will be further reforms in the future, causing more uncertainty, while slightly more raised concerns about the potential cost implications of an IR35 repeal or further reforms.
While potential legislation changes are troubling, there are other issues that are of greater priority for contractors in the current economic climate.
Contractors in the older age bracket (55-64 years) voiced worries about, material shortages, labour and material costs, health and safety, and late payments. While younger contractors (25-34) shared concerns about late payments, poor cash flow, and finding new clients. One in five of the younger contractors were also worried about finding ways to work around IR35 legislation and any potential changes to the legislation.
These combined strains have meant that during the last 12 months, 76 per cent of contractors have considered or are still considering leaving contracting – including 85 per cent of those in the transport and logistics industry, and half of all 55–64-year-olds, which could leave a large skill shortage in a range of industries.
Cool Company’s Kris Simpson, said: "According to our research, right now, UK contractors are working an average of 58 per cent of their contracts within IR35 and more than half (54 per cent) say their client charge rate has increased in the last quarter.
"Although the initial implementation of the Off-payroll legislation was not without its pain points, it is no longer the primary concern for contractors as it stands. It now seems the uncertainty surrounding future changes to IR35 and worries such as cash flow, finding new clients, and general economic concerns have become the greatest priority for many.
"Although the proposal to repeal the Off-payroll legislation came with the best of intentions for the economy, it – and any future revisions – can only cause further disruption to the industry. There are better ways to support businesses and their workers through this difficult economic period than once again changing the rules they have to work with."
Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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