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Article misses crucial and always overlooked point. Working class have lost stake in the economy, by government changing IR35 legislation to prevent worker owne

Article misses crucial and always overlooked point. Working class have lost stake in the economy, by government changing IR35 legislation to prevent worker owned businesses from making profit. This was lobbied by big corporations who were losing talent (it was easy to start own company and offer services directly to clients) and contracts (small business could undercut them and offer better quality) and was falsely sold to the public as "anti-tax avoidance" measure. In an environment where working class became a captive workforce, they no longer have interest in getting better at what they do, because it will only benefit corporation they work for. They can't use their talent in their own business, because they can't run it. Add wage compression and the fact the government allowed big corporations to import even cheaper workforce from overseas, compounded the problem. Same with public sector - we had an ecosystem of small businesses delivering services and that was destroyed. Any public sector body buying these services got fined and "nudged" to buy from more expensive big corporations. So you get no productivity, brain drain and big corporations taking massive profits overseas, where small business would spent the money locally stimulating the economy. It's a slow car crash, nobody is paying attention to.

Nursie 2y ago
IR35 is not really about the working class though is it? It's about the professional class of contractors, tv presenters etc, who at various times were doing things that looked suspiciously like regular jobs, but somehow were paying a lot less tax. I agree the implementation of IR35 is an absolute, grade-A clusterfuck, and leaves workers having to do things like buy IR35 insurance, and make in/out determinations themselves, only for HMRC to come up with new ways to try and classify them as 'managed service companies', or a myriad other ways to undermine the entire sector, such that financial ruin can be dangled over people's heads like the sword of damocles... But working class? Pull the other one!
- varispeed 2y ago
  It's a common misconception that IR35 only affects a narrow group of high-earning professionals - TV presenters, consultants, and the like. But that framing misses the wider picture and, frankly, suits the narrative that was used to sell the legislation to the public. In reality, IR35 has had a broad and damaging impact on a much wider group of skilled workers - IT contractors, engineers, healthcare professionals, tradespeople - many of whom built small, legitimate limited companies as a way to work flexibly, compete fairly, and build some financial security. It was one of the few viable paths to independence left, and IR35 has made it effectively unworkable for many. Large corporations didn't like losing contracts and talent to smaller, more agile competitors. IR35 conveniently removed that competition by making small operators too much of a compliance risk to hire. Meanwhile, public sector bodies were discouraged—sometimes even penalised—for engaging small suppliers, further consolidating the power of the big consultancies. The media focus on celebrity cases wasn't accidental. HMRC gained free publicity and public support by targeting high-profile individuals - knowing it would reinforce the idea that IR35 was closing tax loopholes rather than quietly dismantling a thriving small business ecosystem. The result is a workforce with less autonomy, less incentive to go above and beyond, and fewer opportunities to build something for themselves. This isn't just about tax - it's about economic structure, incentives, and who gets to participate in the rewards of their own labour. And when those opportunities disappear, so does productivity, innovation, and local economic resilience.
  - Nursie 2y ago
    > IT contractors, engineers, healthcare professionals You're not disagreeing with me, other than that I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class. > tradespeople Still do run small limited companies AFAICT. Certainly the ones I used to interact with. Mostly because they have multiple clients and are a lot harder to point at and say "that's not a real business!"
    - nand_gate 2y ago
      Unlike the US, UK is closer to EU in that IT contractors, engineers, tech work is paid and perceived closer to skilled labour than professional-managerial class. Upper-middle class is mostly bankers, barristers, surgeons, some politicans and so forth.
      - Nursie 2y ago
        I am British and have been a consultant. While permanent IT staff are often regarded as generic office workers, usually in poorly performing small to medium enterprises in backwaters around the country, in London and in Finance this is not really the case. Consultant IT people can make out like bandits, IR35 or no, and even those perm people in the backwaters are middle class in earning and habits. It’s absolutely not a working class occupation. Incidentally this attitude from middle management in (mostly) non-London SMEs is a big part of why they are doomed to fail - they value middle-management above skilled workers and end up in a doom spiral of low pay, low productivity and low expectations. If you’re in one of those situations - get out, opportunity is out there. But you won’t find it in a shabby office at the back-end of an industrial estate in Basingstoke.
        varispeed 2y ago
        There's a common mistake in equating class with job title or postcode. Being a consultant doesn't automatically make someone middle class—especially when they don't own the means of production, don't control their work, and can't build anything lasting from it. That's the real distinction. Class is about power and autonomy, not just how polished your CV looks or how many screens are on your desk. Many skilled workers set up limited companies not to "make out like bandits" but to gain a small degree of control in a system that otherwise offers very little. IR35 took that away, not from boardrooms or multinational firms, but from individuals trying to carve out their own space. It wasn't just a policy shift—it was a signal: you're not allowed to operate outside the machine. This has little to do with London versus the rest. It's about how the economy is increasingly structured to funnel all meaningful work through large gatekeepers, whether private or public. The destruction of small-scale service businesses - especially in the public sector - didn't just hurt livelihoods. It erased entire layers of local innovation, independence, and pride in craft. The result is exactly what we see now: a drained workforce with no stake in the outcome, no reason to go above and beyond, and no path to build something of their own. That's not a London problem or a Basingstoke problem. That's a systemic one.
physicsguy 2y ago
> It's a slow car crash, nobody is paying attention to. Because IR35 is not the major issue facing the UK that you seem to think it is...
nand_gate 2y ago
Don't most countries have similar policies to IR35? Devil's advocate as I, too, dislike how it was basically lobbied by big corps but really it seems unsustainable for high tax Euro countries to allow their people too much working freedoms?
- varispeed 2y ago
  Yes, many countries have rules affecting contractors, but the UK's IR35 is unusually aggressive and damaging. It wasn't designed to stop "abuse" - it was designed to limit economic independence for individuals running small service - based businesses. The idea that "too much working freedom" is unsustainable in high-tax countries reflects a deeply top-down, corporatist mindset. It assumes that ordinary people being in control of how they work is somehow a problem to be fixed - especially if they start competing with entrenched players. In reality, IR35 wasn't about tax fairness. It was a response to small businesses becoming too competitive - delivering the same services as large consultancies, but with more agility and less overhead. The legislation didn't level the playing field - it tilted it to protect big corporations from small rivals, using misleading narratives to justify it. Other countries may have similar pressures, but few have responded by attacking independent economic agency as directly as the UK has.

Nursie 2y ago

IR35 is not really about the working class though is it? It's about the professional class of contractors, tv presenters etc, who at various times were doing things that looked suspiciously like regular jobs, but somehow were paying a lot less tax. I agree the implementation of IR35 is an absolute, grade-A clusterfuck, and leaves workers having to do things like buy IR35 insurance, and make in/out determinations themselves, only for HMRC to come up with new ways to try and classify them as 'managed service companies', or a myriad other ways to undermine the entire sector, such that financial ruin can be dangled over people's heads like the sword of damocles... But working class? Pull the other one!

varispeed 2y ago
It's a common misconception that IR35 only affects a narrow group of high-earning professionals - TV presenters, consultants, and the like. But that framing misses the wider picture and, frankly, suits the narrative that was used to sell the legislation to the public. In reality, IR35 has had a broad and damaging impact on a much wider group of skilled workers - IT contractors, engineers, healthcare professionals, tradespeople - many of whom built small, legitimate limited companies as a way to work flexibly, compete fairly, and build some financial security. It was one of the few viable paths to independence left, and IR35 has made it effectively unworkable for many. Large corporations didn't like losing contracts and talent to smaller, more agile competitors. IR35 conveniently removed that competition by making small operators too much of a compliance risk to hire. Meanwhile, public sector bodies were discouraged—sometimes even penalised—for engaging small suppliers, further consolidating the power of the big consultancies. The media focus on celebrity cases wasn't accidental. HMRC gained free publicity and public support by targeting high-profile individuals - knowing it would reinforce the idea that IR35 was closing tax loopholes rather than quietly dismantling a thriving small business ecosystem. The result is a workforce with less autonomy, less incentive to go above and beyond, and fewer opportunities to build something for themselves. This isn't just about tax - it's about economic structure, incentives, and who gets to participate in the rewards of their own labour. And when those opportunities disappear, so does productivity, innovation, and local economic resilience.
- Nursie 2y ago
  > IT contractors, engineers, healthcare professionals You're not disagreeing with me, other than that I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class. > tradespeople Still do run small limited companies AFAICT. Certainly the ones I used to interact with. Mostly because they have multiple clients and are a lot harder to point at and say "that's not a real business!"
  - nand_gate 2y ago
    Unlike the US, UK is closer to EU in that IT contractors, engineers, tech work is paid and perceived closer to skilled labour than professional-managerial class. Upper-middle class is mostly bankers, barristers, surgeons, some politicans and so forth.
    - Nursie 2y ago
      I am British and have been a consultant. While permanent IT staff are often regarded as generic office workers, usually in poorly performing small to medium enterprises in backwaters around the country, in London and in Finance this is not really the case. Consultant IT people can make out like bandits, IR35 or no, and even those perm people in the backwaters are middle class in earning and habits. It’s absolutely not a working class occupation. Incidentally this attitude from middle management in (mostly) non-London SMEs is a big part of why they are doomed to fail - they value middle-management above skilled workers and end up in a doom spiral of low pay, low productivity and low expectations. If you’re in one of those situations - get out, opportunity is out there. But you won’t find it in a shabby office at the back-end of an industrial estate in Basingstoke.
      - varispeed 2y ago
        There's a common mistake in equating class with job title or postcode. Being a consultant doesn't automatically make someone middle class—especially when they don't own the means of production, don't control their work, and can't build anything lasting from it. That's the real distinction. Class is about power and autonomy, not just how polished your CV looks or how many screens are on your desk. Many skilled workers set up limited companies not to "make out like bandits" but to gain a small degree of control in a system that otherwise offers very little. IR35 took that away, not from boardrooms or multinational firms, but from individuals trying to carve out their own space. It wasn't just a policy shift—it was a signal: you're not allowed to operate outside the machine. This has little to do with London versus the rest. It's about how the economy is increasingly structured to funnel all meaningful work through large gatekeepers, whether private or public. The destruction of small-scale service businesses - especially in the public sector - didn't just hurt livelihoods. It erased entire layers of local innovation, independence, and pride in craft. The result is exactly what we see now: a drained workforce with no stake in the outcome, no reason to go above and beyond, and no path to build something of their own. That's not a London problem or a Basingstoke problem. That's a systemic one.

physicsguy 2y ago

> It's a slow car crash, nobody is paying attention to. Because IR35 is not the major issue facing the UK that you seem to think it is...

nand_gate 2y ago

Don't most countries have similar policies to IR35? Devil's advocate as I, too, dislike how it was basically lobbied by big corps but really it seems unsustainable for high tax Euro countries to allow their people too much working freedoms?

varispeed 2y ago
Yes, many countries have rules affecting contractors, but the UK's IR35 is unusually aggressive and damaging. It wasn't designed to stop "abuse" - it was designed to limit economic independence for individuals running small service - based businesses. The idea that "too much working freedom" is unsustainable in high-tax countries reflects a deeply top-down, corporatist mindset. It assumes that ordinary people being in control of how they work is somehow a problem to be fixed - especially if they start competing with entrenched players. In reality, IR35 wasn't about tax fairness. It was a response to small businesses becoming too competitive - delivering the same services as large consultancies, but with more agility and less overhead. The legislation didn't level the playing field - it tilted it to protect big corporations from small rivals, using misleading narratives to justify it. Other countries may have similar pressures, but few have responded by attacking independent economic agency as directly as the UK has.