The report from Qdos highlights the significant financial impact of the IR35 reforms introduced in 2021, suggesting the change has led to an estimated £4.2 billion in additional tax. Though the report assesses a net gain in contractor opportunities post-reform, critics argue that it has generated confusion and reduced contractor engagement, with many businesses hesitant to hire contractors. Qdos CEO Seb Maley emphasizes that claims of increased opportunities are misleading, noting that the reform has disrupted the contracting sector and required time for businesses to adapt.
The reality is, these rules created confusion, uncertainty and damage to the contracting landscape. Many businesses stopped engaging contractors as a direct result of the reforms.
We have seen evidence that only a small number of individuals may have moved from working through their own PSC to potentially not working over the time of the reform; and we estimate that more PSC workers have been unaffected by the reform than affected.
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