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IR35 Reforms are number 1 concern

IR35 Reform Tops List Of Contractor Concerns

Recent research has found that contractors’ main work worry is the possibility of the recent reforms to IR35 regulation being extended to the private sector.


The study, conducted by the contractor insurance company Qdos Contractor, found 48% of contractors consider the prospect of IR35 reforms being applied to the private sector their main concern, dwarfing the 18% who were most worried about competition for new contracts.

It also found that a third (33%) would switch to full time employment if the IR35 reforms were applied to the private sector, while 12% would consider emigrating or taking early retirement.


It’s no surprise that these reforms are causing such concern. The Telegraph recently reported on research from IT recruiters, CW Jobs, showing that 71% of its clients had experienced a reduction in their income because of the recent changes to IR35, with a quarter of these reporting a reduction of close to 30%.

Here at Contracting Scout, we’ve also documented the extensive problems caused by the April IR35 reforms, which seem likely to place an unfair tax burden on genuine contractors working in the public sector. Alternatively, the reforms might prevent limited company contractors accepting public sector roles altogether, with public sector bodies such as TfL introducing a blanket ban.

Because IR35 has become a major concern for contractors, preventing them from accepting public roles and significantly affecting their incomes, it’s not surprising that many in the industry chose to support IT contractor Mike Gibson in his legal challenge against the IR35 reforms in the public sector.


This is also why why we produced a detailed IR35 guide to help contractors fully understand the implications of the regulation and the steps they can take to avoid being affected unnecessarily.


Umbrella guide

With the concerns surrounding IR35 being so great, many contractors are choosing to switch from operating via a limited company to the umbrella model, under which IR35 does not apply. This option also significantly reduces the amount of admin contractors have to complete but the take home pay will likely be lower.

With this move becoming increasingly popular, we are compiling a detailed guide on making the switch, which will provide a full outline of the pros and cons and the process involved.

Check back shortly for this latest guide and if you have any questions in the meantime, please do get in touch with us.