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IR35 is causing new problems for contractors – seeking clarity is vital

We thought we’d already documented the problems the latest IR35 regulation changes are causing contractors. Unfortunately, however, a recent story in Contractor UK demonstrates the ability of the reforms to hinder the attractiveness of contracting in new and surprising ways.

The article reports that a recruitment agency has covertly inserted a clause into a consultant’s contract that shifts the responsibility for a wrongful declaration on IR35 status away from the agency and on to the contractor.

This is despite the fact that the very point of the recent reforms to IR35 regulation is to take this responsibility away from the contractor, so that the public sector body or end user makes this decision.

As a result, there’s a debate over whether this clause would actually be enforceable.

Either way, the story demonstrates how these reforms could potentially introduce the worst of all worlds. On the one hand, limited company contractors could be denied roles as a result of risk-averse public sector bodies implementing blanket bans, as in the case of TfL. On the other hand, they could be at risk of accepting a contract without being aware that they are responsible for a possible  incorrect decision on their IR35 status.


Industry backlash

Given this worst of all worlds scenario, it’s not surprising that another Contractor UK story highlights the strength of feeling against the recent reforms.

This outlines how IT contractor Mike Gibson created a fundraising page to support a legal challenge to the IR35 reforms and has already smashed his target, raising £11,150 in just 22 days.

Gibson describes how “people are losing their livelihoods – even the very roof over their heads – because of this awful, discriminatory piece of legislation”.

Against this backdrop, and with the reforms continuing to damage opportunities for contractors in new ways, it’s perhaps not surprising this fundraiser has reached its target so quickly.


Get detailed information

The best way to deal with the reforms to IR35 is to fully understand what they mean for you – and the actions you can take to avoid being affected unnecessarily.

As a result we’ve created a comprehensive IR35 guide, which can be downloaded here. We’re also offering a free 10-minute consultation to anyone concerned about the changes.

Additionally, because contractors are increasingly opting to move from using a limited company to the umbrella model, in response to the reforms, we’re compiling a detailed guide on what this involves and the pros and cons of pursuing this option.

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