IR35 public sector changes are causing delays on London Underground renewal

(2 minutes to read)

From April 6th 2017, new rules were put in place regarding contractors working in the public sector and their IR35 status. This has meant that many contractors are now choosing to work in the private sector instead, which has resulted in major delays with the renewal of the London Underground.

With the IR35 public sector reform resulting in many contractors choosing to look else where for work, new data has revealed that these changes have had a significant impact on the London Underground renewal.

Research from TfL has confirmed that the severe delays to the renewal London Underground rolling stock is due to the changes to the IR35 public sector rules.

The data shows that this delay has been caused by the number of weld project contractors leaving, which has resulted in the project running more than 90 days late.

The TfL’s explanation of the delay says:

A significant number of critical weld project employees left TfL as a result of IR35 – a revised tax legislation affecting public sector contractors. We are currently working on mitigations to reduce the impact on the project.

The news comes in the same week that medical professionals are threatening legal action over IR35 rules in the NHS.

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The Association of Independent Professionals and the Self-Employed (IPSE) have responded to this latest news.

Andrew Chamberlain, IPSE’s Deputy Director of Policy said, “This report confirms what we have known all along. The changes to IR35 have damaged the ability of public sector organisations to attract the talent they need and deliver projects on time.”

“There is mounting evidence that the IR35 changes in the public sector are causing significant disruption. IPSE is renewing its call for a comprehensive review of the impact of this measure across the public sector.”

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