Off-payroll working reforms have caused the number of UK IT contractors to decline for the first time in a decade.
Accountancy firm Access Financial says that the number of IT contractors had increased nearly every year since 2008 but declined by 2.4 percent in 2018, from 125,012 to 121,989, according to government figures.
IR35 rules ensure that self-employed individuals who are contracted by a company and work like an employees pay the same income tax and national insurance contributions as those employees, regardless of the structure they work through. This shifts the responsibility of determining employment status from workers to the organisation hiring them.
Kevin Austin, CEO of Access Financial said: “While this is a modest fall it must be seen in the context of a steady year-on-year increase in the number of IT contractors since the financial crisis. The number of IT contractors jumped by 64 percent between 2009 and 2017, which was driven by demand from both IT professionals and organisations using IT skills.
“There have already been reports of large scale users of contractors, such as banks, saying they will not engage off-payroll workers from next April but that may turn out to be a knee-jerk reaction similar to what was seen in the public sector when the rules were first introduced.”
He thought that it was possible that a further decline in the number of IT contractors could happen next year when the off-payroll reforms hit the private sector and companies may be reluctant to employee contractors.
