New research by Qdos Contractor has revealed that nearly one in three contractors felt that they had been “bullied” by their clients into accepting a working agreement that benefited the clients. This suggests that the Government’s approach to IR35 may not be working as intended.
HMRC’s approach to IR35 compliance was recently in the spotlight due to the BBC’s insistence that its contractors work through their own limited companies or not at all.
According to one contractor at the BBC: “We were never given the option of being staff. This was industrial-level tax avoidance by the BBC.”
The Times published an investigation that concluded that this practice could have saved the BBC millions in tax. All this came to light following HMRC’s investigation of presenter Christa Ackroyd’s IR35 status. The decision in her case found that her contract resembled employment, not service.
With these revelations, concerns have been growing over the number of workers pressured into entering contracts that protect the client but not the individual.
The recently launched IR35 consultation does touch on the question of whether contractors need greater security when it comes to determining employment status. However, extending the IR35 rules to the private sector will not help contractors – it would simply give clients in the private sector the control to set a contractor’s status. If further reform takes place, then the bullying might stop, as the client would set the contractor’s status. On the downside, this might not mean that assessment accuracy would improve.