A new poll has revealed that the vast majority of contractors have little faith in new Prime Minister Liz Truss to adequately review IR35 legislation. The study, from contractor services firm Qdos, showed that 94 per cent of the nearly 480 contractors polled felt that Truss’ pledge to review IR35 was an “empty promise”.
During her successful campaign to become Conservative Party leader, Truss twice committed to reviewing IR35 rules, which came into effect for private sector businesses last year and for public sector organisations in 2017. However, the Qdos study found that just 5 per cent of respondents have faith in the new Prime Minister to deliver on this promise.
IR35 was introduced by HMRC in order to address perceived tax avoidance. The rules moved the responsibility for determining tax status from self-employed workers to the organisations that hire them.
The administrative burden of determining IR35 status has led to many firms adopting blanket policies of designating all contractors as “inside IR35”, meaning they are charged the same tax as full-time employees, while some firms have instead chosen to no longer engage contractors.
The rules have been described as having a huge impact on the UK’s self-employed workforce, as well as the organisations that hire freelancers. According to Qdos, previous reviews of the rules have delivered little or no change, leaving many contractors sceptical of the government’s ability or willingness to act.
Qdos CEO Seb Maley commented: “The fact that the overwhelming majority of people have next to no faith in the new prime minister just to review IR35, let alone fix this legislation’s fundamental flaws, says it all. Contractors’ confidence in the government to do the right thing when it comes to IR35 is perhaps at an all-time low.”
“I’m not surprised, though. There have been countless reviews, consultations and inquiries into IR35, few of which have resulted in change or progress. Even findings from the House of Lords have fallen on deaf ears, with the government ignoring many valid and constructive recommendations to make this complex legislation fairer.”
“Above all else, that so few people – whether contractors or businesses – believe that a review will be held at all provides food for thought for the new prime minister.”
