The IR35 public sector changes came into force in April of this year, causing concern to many contractors. HMRC’s ESS Tool is designed to help people decide their IR35 status, but a recent report that surveyed 1,508 contractors revealed that many do not trust it.
The survey was carried out by Qdos Contractor, a leading contractor tax advisor. The findings revealed that 85 per cent of contractors do not think that the ESS Tool is reliable enough to make accurate decisions on whether their public sector contracts fall within IR35 or not.
Some of the responses included:
- “It’s in a constant state of flux. I understand the advantage of Agile delivery, but if ever there was an example of something that needed to be finished before it was released, this is it. How can I trust that a decision that the tool gives me today will still be valid tomorrow?”
- “They keep tweaking it, which constantly moves the goalposts.”
The biggest concern for contractors using the tool was the regular changes made to it. However, despite contractors’ misgivings about the tool, Qdos Contractor did find that 88 per cent of agencies and public sector bodies had contacted contractors, an increase of 30.29 per cent from before 6th April. In addition, 62 per cent of contractors had not seen a change in their IR35 status.
Qdos Contractor CEO Seb Maley said: “That such a high proportion of contractors just don’t trust the very tool used by many public sector clients and agencies to determine their IR35 status is worrying. On release, the tool was found to give inconsistent results, and regular changes and on-the-go updates have hardly helped.”