Most contractors won't quit amid IR35 reforms

Contractors are showing tremendous resilience in these unsettling times

Amid reports of blanket IR35 decisions and fears still held by many contractors that private sector reform will mirror the public sector changes enforced in 2017, you could forgive independent workers for being worried about what the future holds. 

While most contractors are understandably concerned about life after April 2020, when their medium and large clients become responsible for administering IR35, Qdos research does at least demonstrate that, by and large, contractors have no intention of quitting. 

According to our latest survey, which over 1100 contractors who are affected by incoming IR35 changes participated in, more than half (51%) intend to continue working this way. This is regardless of the challenges and uncertainty that IR35 reform poses to them.

Granted, 39% of contractors did tell us they are currently undecided about their plans for the post-IR35 reform world - and there’s no hiding from the fact that this is concerning. However, just 10% have said they will stop working independently as a result of controversial changes - a figure that contrasts with speculation that most contractors will search for permanent jobs as a direct result of losing the right to determine their own IR35 status.  

So what do these statistics tell us? Firstly, that contractors are showing tremendous resilience in what are unsettling times. Secondly, that perhaps contractors do have faith in securing outside IR35 opportunities after all. 

This is certainly the view held here at Qdos. While IR35 changes are a needless, short-sighted tax-grab from the Government, we are confident they can be managed. Through our work with over 100 recruitment agencies and private sector end-clients, tens of thousands of outside IR35 contracts will exist after April 6th next year. 

At this moment in time, it is also our opinion that IR35 reform will go ahead. This is despite last-minute promises made by the Chancellor before the General Election to review the changes. Most contractors also share this view, according to our survey results. 

Only 6% of contractors see it as very likely or likely that the Government will scrap incoming reform, which shows the lack of belief independent workers have in the Conservatives currently. Around one in five (21%) are currently sat on the fence, unsure whether a potential review will lead to the delay or halt of reform. The remaining 73% of independent workers, who think there is zero chance changes will be cancelled (16%) or see it as very unlikely (57%) tells you all you need to know.

That’s not to say Qdos won’t continue to stress to the Government the importance of reconsidering. After Boris Johnson and his party won a big majority in the General Election, our CEO, Seb Maley, immediately made it clear that the Conservative Party has a responsibility to honour its promise to review IR35 changes. Should these timeframes not work for the Government, that is already under pressure to resolve the Brexit stalemate, then IR35 reform must be delayed or, even better, halted altogether.

In the next few weeks, details of the Government’s IR35 review should emerge - assuming the Chancellor stays true to his word. In the meantime, the fact that most contractors have said IR35 reform will not stop them from working independently is positive news as the sector gears up for change.

The resilience being shown by contractors also sends a clear message to the private sector firms planning a risk-averse approach to reform: force contractors onto the payroll you will lose the skills, unrivalled flexibility and savings enjoyed when compliantly engaging independent workers outside IR35.