Why IR35’s “New Opportunities” Promise Was a Face‑Palm
Last week, Qdos — a well‑known IR35 specialist — released a furious rebuttal to the government’s own assessment of the off‑payroll working rules (IR35 reform). The official report claims the changes popped up £4.2 billion in extra tax and that contractors are now doing a whole new job, but the truth is a lot messier.
What the Numbers Really Say
- Over 120,000 contractors have felt the chill of the reform.
- On average, those impacted end up paying £10,000 more in tax each year.
- Around 45,000 fewer people jumped on the contractor bandwagon right when the rules hit.
- Most folks remain untouched by the change, but the slice that does suffer is sizable.
- Strangely, the report claims overall employment for PSC workers has increased post‑reform.
Qdos’s Hot Take
CEO Seb Maley poured his frustration on the paper: “The report loudly oozes bold claims, but it downright misfires. Saying more contractors have got opportunities now is pure junk.” He argued that an invite of “new opportunities” only helps the public face stand by the behest of great anecdotes about businesses that still cling to the old ways.
“What actually happened?” Maley asked. “A lot of companies halted their contracting activity because of confusion and uncertainty around the rules. It’s been a slow‑paced battle for firms to get their heads around the system, and it still isn’t smooth.”
Tax vs. Compliance — The Real Difference
That extra £4.2 billion the government hypes up is not a surprise. Maley warns the money more likely came from contractors mistakenly placed on payroll or marked inside IR35 when they were genuinely self‑employed. This “over‑taxing” is not really a sign of better compliance but of a system failing to distinguish between good and bad cases.
Keep Your Eye on the Greenroom (and the Buttons)
Don’t get swept off your feet by the lofty headline; the ground reality remains a tangle of policies, misapprehensions, and a cut‑thin line between “self‑employment” and “inside IR35.” The time has come to watch how this mess unravels, not just the headline numbers but the actual places the reforms hit.
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