A new survey has revealed that IR35 tax rules are continuing to have a negative impact on self-employment.
According to the report, 21% of the 1,300 contractors surveyed said they’re not currently working, with half of them saying the reason for this is because of the IR35 reforms.
As many as 55% said they’d turned down work in the last 12 months because the client deemed the role as being ‘inside IR35’.
Commenting on its second annual survey looking into the impact of IR35 rules on the self-employed sector, Andy Chamberlain, IPSE Policy Director, said, “Three years later, the off-payroll rules are still keeping thousands of highly skilled individuals out of work. It’s staggering that the Chancellor is happy for this to continue at a time when economic inactivity is one of his biggest concerns.
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“Our findings show that contractors want to prioritise clients who are willing to hire them on a freelance basis and are happy to walk away from those who won’t – even if this means not working at all.
“The blame for this impasse doesn’t rest with clients – it rests with the culture of fear that is propagated by the IR35 rules. Having noted HMRC’s dogged determination to win high profile IR35 battles with TV stars – brushing off successive court defeats in the process – hirers are concluding that working with freelancers risks inviting too much hassle from the taxman.
“This is a damning legacy for a Chancellor who claims to be on the side of business. If he is serious about cutting inactivity and growing the economy, he would get round the table with those who deal with the real-world impacts of these reforms and urgently address them.”
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