IR35 reforms cause businesses to cut contractor numbers

As many as 28% of businesses say they’ve had to reduce the number of contractors they use due to the most recent IR35 changes.

These figures from the Association of Independent Professionals and the Self-Employed (IPSE) are worrying considering that nearly half of UK firms admit that they couldn’t achieve their level of growth without the help of contractors.

The research, conducted by YouGov on behalf of IPSE, revealed that 42% of businesses say that the IR35 reforms have had negative financial implications for them.

Derek Cribb, CEO of IPSE, said, “While the media, over the past year, has mainly analysed the significant and damaging impact of the reforms on self-employed workers, today’s research shows that the changes to off-payroll working has also hindered their clients.

“Businesses have long relied on freelancers to provide additional expertise and support. The changes to IR35 in the private sector in April 2021 have made it harder for them to hire contractors and has therefore made it even more difficult for them to grow during these turbulent economic times.

“If the government wants to help companies recover post-pandemic, then it needs to start by rethinking IR35. Self-employed workers provide a valuable service for businesses and without a governmental review or further reform, companies will find they aren’t able to hire the necessary skills and talent that freelancers provide and that they are recovering at a slower pace compared to international competitors.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.