Most contractors believe that agencies and public sector bodies are unable to make accurate IR35 decisions without input from them. There are real concerns that contractors may leave the public sector as a result of the IR35 changes.
These changes have meant that it is now the agencies and public sector clients who are responsible for determining the employment status of any contractors that they engage. Many end users use the HMRC online ESS tool to establish the employment status of their contractors, although the accuracy of this tool has been questioned.
The ESS online tool does not require input from the contractor. Research by Qdos Contractor, the contractor tax adviser, has revealed that 88 percent of contractors do not believe that clients can make accurate IR35 decisions without involving them in the process.
Seb Maley, the CEO of Qdos Contractor said, “The decision to hand public sector clients and agencies the responsibility for setting contractor’s IR35 status has understandably left the vast majority of contractors feeling helpless. It is now largely inexperienced public sector clients and agencies to make potentially career-defining IR35 decisions. But how can one make a well-informed, accurate decision on a contractor’s employment status without consulting, what is undoubtedly the most vital component, the contractor?”
Concerns have been raised that if contractors are put inside IR35, they will simply choose to leave the public sector, taking their valuable expertise with them. For that reason, agencies and public sector clients are being encouraged to collaborate with contractors in making IR35 decisions.