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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 mis

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.
- varispeed 2y ago
  > I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class. IT has been one of the only modern trades where working-class people could genuinely break through - without inherited privilege, connections, or expensive qualifications. All it took was a computer, determination, and skill. For decades, it offered an alternative route to upward mobility that wasn't gatekept by traditional class boundaries. To say those people aren't "working class" anymore simply because they found success in a high-paid field is to misunderstand how class mobility works - and to dismiss the significance of what's been lost. IR35 didn't just hit a few middle-class professionals - it cut off a rare path to independence that was uniquely accessible to people from working-class backgrounds. That's what makes it so damaging. It's not just about tax or regulation - it's about who's allowed to build something for themselves, and who gets pushed back into being a compliant employee for a large organisation. > Still do run small limited companies AFAICT You're absolutely right—tradespeople doing B2C work are largely unaffected, because IR35 targets B2B relationships, especially when the client is a medium or large company. But that actually reinforces the concern: it's access to the broader market - especially corporate and public sector clients - that’s been cut off. For working-class professionals who moved into areas like IT, healthcare, or consulting, IR35 has closed the door to operating as a small business in those spaces. They can still work - but now only as employees or through intermediaries, with fewer rights and no control. They’re denied the same freedom tradespeople still have in B2C, despite offering equally legitimate, client-driven services. So yes, plumbers and electricians can run limited companies - but if someone from a similar background wanted to build a small IT consultancy or contract directly with the NHS, that’s now a legal minefield. The playing field isn’t level - it’s skewed in favour of large firms, and that restriction disproportionately hurts those without generational wealth or corporate safety nets.
  - Nursie 2y ago
    There is no such thing as a working class professional! It’s clear we’re talking past each other. I disagree that IR35 has had a specific effect on social mobility, but am happy to leave the conversation here!
    - 2y ago
throw1111221 2y ago
Are there any metrics that could be used to test this theory?

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.
varispeed 2y ago
> I don't consider those "working class" occupations. In general in the UK those are quite often middle to upper middle class. IT has been one of the only modern trades where working-class people could genuinely break through - without inherited privilege, connections, or expensive qualifications. All it took was a computer, determination, and skill. For decades, it offered an alternative route to upward mobility that wasn't gatekept by traditional class boundaries. To say those people aren't "working class" anymore simply because they found success in a high-paid field is to misunderstand how class mobility works - and to dismiss the significance of what's been lost. IR35 didn't just hit a few middle-class professionals - it cut off a rare path to independence that was uniquely accessible to people from working-class backgrounds. That's what makes it so damaging. It's not just about tax or regulation - it's about who's allowed to build something for themselves, and who gets pushed back into being a compliant employee for a large organisation. > Still do run small limited companies AFAICT You're absolutely right—tradespeople doing B2C work are largely unaffected, because IR35 targets B2B relationships, especially when the client is a medium or large company. But that actually reinforces the concern: it's access to the broader market - especially corporate and public sector clients - that’s been cut off. For working-class professionals who moved into areas like IT, healthcare, or consulting, IR35 has closed the door to operating as a small business in those spaces. They can still work - but now only as employees or through intermediaries, with fewer rights and no control. They’re denied the same freedom tradespeople still have in B2C, despite offering equally legitimate, client-driven services. So yes, plumbers and electricians can run limited companies - but if someone from a similar background wanted to build a small IT consultancy or contract directly with the NHS, that’s now a legal minefield. The playing field isn’t level - it’s skewed in favour of large firms, and that restriction disproportionately hurts those without generational wealth or corporate safety nets.
- Nursie 2y ago
  There is no such thing as a working class professional! It’s clear we’re talking past each other. I disagree that IR35 has had a specific effect on social mobility, but am happy to leave the conversation here!
  - 2y ago

throw1111221 2y ago

Are there any metrics that could be used to test this theory?