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This shouldn't be a win for genuine contractors but it very obviously is. Since the reforms that are being wound back were introduced there has been a huge chil

This shouldn't be a win for genuine contractors but it very obviously is. Since the reforms that are being wound back were introduced there has been a huge chilling effect on the flexible labour market here because a huge proportion of larger clients are highly risk-averse and push all contractors into IR35/umbrella arrangements as a blanket policy. Of course they aren't supposed to do that and they are supposed to assess each contract individually and there are supposed to be appeals processes if the IR35 status is then determined incorrectly. However we live in the real world and what is "supposed to" happen means very little. The market for contractors today is a fraction of the size it used to be before the new rules came in. Typical rates in many parts of the market actually fell since the changes when logically several factors should have been pushing them up if the market was functioning properly. No doubt some part of that was getting rid of disguised employees because those people do exist. However the effect has been far too widespread and affected far too many genuinely independent workers and their clients as well.

varispeed 4y ago
> Of course they aren't supposed to do that and they are supposed to assess each contract individually and there are supposed to be appeals processes if the IR35 status is then determined incorrectly. That part was completely botched. The HMRC themselves admitted that role based assessments are permitted. Also they have deceived the public what assessment actually means. If the client writes the contract in a way that puts service provider in-scope (to minimise the risk), then there is not much that can be done. The appeal is basically requesting the client to change the contract, which for obvious reasons they won't do, because that would put them at risk. So the client can always walk away when you appeal. From the IR35 perspective, the individual situation of the contractor does not matter.
Nextgrid 4y ago
I wonder whether the net tax revenue even from "disguised employees" (both the taxes they pay directly such as Corp & Dividend tax, as well as indirect taxes such as those they pay when they actually spend their gains) was still more in volume thanks to a healthy, flexible contracting & IT market rather than the sad & deserted wasteland we have now. Tax avoidance is a problem but maybe it's better to skim off a little bit from many people than take a lot from a very few people while scaring the rest away?
- Silhouette 4y ago
  As far as I know there has never been much evidence that government tax receipts increased significantly as a result of introducing IR35 even after the initial changes when some "contractors" went permanent as intended. This question has been asked for probably 20 years now and never had much of a convincing answer. The usual government stance when they give one at all seems to be that they couldn't possibly reverse the rules now because it would be inviting new abuse to start. Also I have a rock to sell you and if you carry it around with you all day it will protect you from being eaten by dinosaurs.

varispeed 4y ago

> Of course they aren't supposed to do that and they are supposed to assess each contract individually and there are supposed to be appeals processes if the IR35 status is then determined incorrectly. That part was completely botched. The HMRC themselves admitted that role based assessments are permitted. Also they have deceived the public what assessment actually means. If the client writes the contract in a way that puts service provider in-scope (to minimise the risk), then there is not much that can be done. The appeal is basically requesting the client to change the contract, which for obvious reasons they won't do, because that would put them at risk. So the client can always walk away when you appeal. From the IR35 perspective, the individual situation of the contractor does not matter.

Nextgrid 4y ago

I wonder whether the net tax revenue even from "disguised employees" (both the taxes they pay directly such as Corp & Dividend tax, as well as indirect taxes such as those they pay when they actually spend their gains) was still more in volume thanks to a healthy, flexible contracting & IT market rather than the sad & deserted wasteland we have now. Tax avoidance is a problem but maybe it's better to skim off a little bit from many people than take a lot from a very few people while scaring the rest away?

Silhouette 4y ago
As far as I know there has never been much evidence that government tax receipts increased significantly as a result of introducing IR35 even after the initial changes when some "contractors" went permanent as intended. This question has been asked for probably 20 years now and never had much of a convincing answer. The usual government stance when they give one at all seems to be that they couldn't possibly reverse the rules now because it would be inviting new abuse to start. Also I have a rock to sell you and if you carry it around with you all day it will protect you from being eaten by dinosaurs.