The government’s IR 35 reform is going to seriously damage the IT industry according to Simon Winfield, UK and Ireland MD at global recruitment firm Hays.
The government has refused to delay the April start date of the reforms and is only going through token London-centric consultation exercises which it appears keen to ignore.
Winfield warned: “If they are undertaking additional consultation now until mid-February and the reforms are coming into effect from April, there simply isn’t enough time to give this the attention it so desperately needs,” he said.
He said that introducing the new laws on 6 April will counter any investment in this area. A number of industries are suffering from niche skills shortages and these reforms could worsen these gaps. The IR35 reforms will hit technology harder than any other market and introducing them will counter any investment in this area.
“A number of industries are suffering from niche skills shortages and these reforms could worsen these gaps, just at a time when we have a real opportunity to make the UK a more attractive place to work and do business.
“Further disruption and distractions aren’t what anyone needs now we’ve finally got some of the uncertainty behind us.”
IR35 – allow contractors to determine their employment status when hired by a private organisation. Under the proposed reforms, the determination of tax status will shift to the hiring company.
This means that self-employed individuals who are contracted by a company and operate similarly to an employee of that company will have to pay the same income tax and national insurance contributions as a permanent employee, without the benefits of pension, holidays, and so on.
These reforms apply only to medium-sized to large businesses and could result in the employer paying more for the contractor’s services. IR35 reforms came into effect in the public sector in 2017, which subsequently saw an exodus of IT contractors to the private sector.
