After the off-payroll working reforms were introduced into the private sector in 2021, there was significant interest in how things would eventually pan out.
The change of responsibility for IR35 status determination from contractor to engager was a major shift, and it was always likely that things would take time to settle.
Over two years in, things have calmed down somewhat, but IR35 remains a contentious subject.
So, why does IR35 remain a hot topic of conversation?
IR35 remains an issue of contention.
One of the major reasons IR35 still resides in the spotlight is the HMRC investigations conducted into public sector organisations and the subsequently published results.
The most recently reported IR35 tax bill of £36M, owed to HMRC by Innovate UK, the UK's innovation body, is just another hefty bill contributing to an approximate total of £300M incurred from the likes of the Ministry of Justice (MOJ), the Department for Work and Pensions (DWP) and the Department for Environment, Food and Rural Affairs (DEFRA).
Subsequently, it's understandable why so many private sector organisations have taken such a cautious approach to the most recent reforms.
Unfortunately, the knock-on effect has seen private sector businesses take an ultra-cautious approach to IR35, resulting in significantly fewer outside IR35 assignments. This reduction has pushed many independent freelancers into umbrella type, employed arrangements and, in the eyes of some, put a stranglehold on the flexibility, entrepreneurship and innovation of the UK contractor workforce.
Are IR35 changes in the pipeline?
Most recently, there has been talk of a remedy to the double taxation issue that has blighted the legislation since the 2017 public sector reforms, but otherwise, there is nothing concrete.
However, IR35 is still flirting around the political agenda, and an article penned by Former Lord Chancellor and South Swindon MP Robert Buckland only served to confirm this.
Sir Robert recently commented that IR35 had become somewhat of a Frankenstein's monster and “that there is no better time to slay it once and for all.”
With a general election on the political horizon and the UK experiencing rising interest rates and increased inflation, such actions might just attract enough voters to influence a result.
It's as we are with IR35 for the time being.
IR35 remains as it is for now, and we all must work with the legislation as best as possible.
At Champion Contractors, we don't see IR35 as a stumbling block for businesses that need the support of skilled and experienced freelancers.
Our online IR35 assessment portal, developed with our employment law partners, helps end-client organisations accurately determine the IR35 status of contract roles and minimises the risk of an incorrect assessment.
For more information, contact the Champion Contractors team on 0161 703 2549 or email info@championcontractors.co.uk.
For further updates, why not follow us on LinkedIn or visit our website at https://www.champion-contractors.co.uk/