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That's nonsense. IR35 basically makes it more difficult for companies to treat an individual like an employee whilst paying them as a "consultant" (saving thems

That's nonsense. IR35 basically makes it more difficult for companies to treat an individual like an employee whilst paying them as a "consultant" (saving themselves various obligations and allowing the "consultant" much more flexibility in avoiding tax). Accenture actually used to hire a lot of people that way themselves... Individual consultants never were competing particularly closely with Accenture or Deloitte or McKinsey and their mass of bodies, brand and board level access, and IR35 really doesn't change their competitive position, or affect small boutique consultancies composed of people who quit Big Consultancy to do better at all. (sure, if you want to spend your next 6 months contracting as an individual on site for one employer you might now need to enlist the support of a specialist umbrella company to assure IR35 compliance, but if you're in that position you're not really competing with expensive big consultants selling massive projects at C level on brand rather than their own capabilities to departments based on individual skillset)

varispeed 2y ago
You're missing how IR35 actually reshaped the ecosystem - not just in terms of tax compliance, but in terms of who's allowed to profit from delivering services. It's not about preventing companies from treating people like employees. In fact, post-IR35, it enabled exactly that - but with fewer rights. Now, individuals can still be engaged for long-term, full-time work, as long as they go through an umbrella company and give up both autonomy and the ability to run a business. The result is employment in all but name, with none of the legal protections, and often less pay due to umbrella fees and unreimbursed business costs. You're also wrong to suggest that independents weren't competing with the likes of Accenture or Deloitte. In practice, they absolutely were - especially in the public sector. Individual consultants and small firms were frequently: - Delivering the same work at lower cost and higher quality - Auditing or overseeing work delivered by big firms - Winning smaller-scale, high-trust engagements directly with departments that didn't need an army of suits and a 200-page PowerPoint. This did threaten the margin-heavy model of large consultancies, and they did lobby for IR35 and the subsequent reforms to de-risk their position. What IR35 achieved was to push out small, agile operators by making them legally and commercially "difficult" to work with - not because they were "tax dodging", but because they lacked the compliance resources and political access to fight back. Meanwhile, large firms were exempt from these concerns. They can place workers with clients indefinitely without IR35 scrutiny, because the worker is not the owner of the delivery company. That's the loophole. The exact same working pattern is treated as fine if the profit flows to Deloitte, and suspicious if it flows to a one-person or small, workers owned limited company. This isn't about "6-month gigs needing umbrellas" - it's about eliminating small, independent service providers from public sector procurement pipelines. It's about monopolising access to taxpayer money. And calling that "ensuring proper employment classification" is naive at best, and disingenuous at worst. IR35 didn't restore fairness. It restructured the market to favour large corporations and removed one of the few viable routes working professionals had to operate independently and build something of their own.

varispeed 2y ago

You're missing how IR35 actually reshaped the ecosystem - not just in terms of tax compliance, but in terms of who's allowed to profit from delivering services. It's not about preventing companies from treating people like employees. In fact, post-IR35, it enabled exactly that - but with fewer rights. Now, individuals can still be engaged for long-term, full-time work, as long as they go through an umbrella company and give up both autonomy and the ability to run a business. The result is employment in all but name, with none of the legal protections, and often less pay due to umbrella fees and unreimbursed business costs. You're also wrong to suggest that independents weren't competing with the likes of Accenture or Deloitte. In practice, they absolutely were - especially in the public sector. Individual consultants and small firms were frequently: - Delivering the same work at lower cost and higher quality - Auditing or overseeing work delivered by big firms - Winning smaller-scale, high-trust engagements directly with departments that didn't need an army of suits and a 200-page PowerPoint. This did threaten the margin-heavy model of large consultancies, and they did lobby for IR35 and the subsequent reforms to de-risk their position. What IR35 achieved was to push out small, agile operators by making them legally and commercially "difficult" to work with - not because they were "tax dodging", but because they lacked the compliance resources and political access to fight back. Meanwhile, large firms were exempt from these concerns. They can place workers with clients indefinitely without IR35 scrutiny, because the worker is not the owner of the delivery company. That's the loophole. The exact same working pattern is treated as fine if the profit flows to Deloitte, and suspicious if it flows to a one-person or small, workers owned limited company. This isn't about "6-month gigs needing umbrellas" - it's about eliminating small, independent service providers from public sector procurement pipelines. It's about monopolising access to taxpayer money. And calling that "ensuring proper employment classification" is naive at best, and disingenuous at worst. IR35 didn't restore fairness. It restructured the market to favour large corporations and removed one of the few viable routes working professionals had to operate independently and build something of their own.