Budget backfire: government will be worst hit by IR35 walkout

The British government will be worst hit by IR35 walkout, warn contractors.

Half (49 per cent) of contractors surveyed warn that vital government departments will be worst affected by a potential public sector walkout.

Research from contractor tax advisor Qdos Contractor reveals that 85 per cent of public sector contractors would leave their roles should they be caught inside IR35 after the 6th April – the date on which public sector companies become responsible for determining the IR35 status of contractors come 6th April.

And the majority of the 2000 UK contractors surveyed believe that government departments will feel the brunt of this potential departure, reflecting growing ill-feeling.

– Of the 2000 surveyed, 42 per cent of contractors are currently engaged in public sector contracts
– 95 per cent of contractors believe major public sector projects will suffer as the result of a contractor walkout
– 49 per cent believe it will be government departments that will suffer most
– 26 per cent are concerned for the NHS
– 12 per cent believe infrastructure projects like HS2 will run into problems
– 13 per cent believe ‘other’ public sector projects, such as The BBC, Ministry of Defence or ‘all of them’ will suffer

Qdos Contractor CEO, Seb Maley, says, ‘Last week’s Budget did little to improve the already fractured relationship between contractors and government. But whether it’s the NHS, HS2 or government departments for that matter, it’s fair to say that every public sector body or project will be worse off should there be a walkout.

‘The threat not just to the public sector, but UK contractors and agencies makes it all the more important that well-educated, expert decisions are made when it comes to setting IR35 status.

‘Changes are a matter of weeks away, and HMRC’s tool for determining IR35 status has only just been released. Questions remain over its effectiveness and accuracy, and put simply people are still wondering what to do.’

Further reading on IR35

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the Smallbusiness.co.uk and Growthbusiness.co.uk titles before moving on to be a Digital Technology reporter for the Express.co.uk.

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