A staggering 80 per cent of contractors plan on abandoning the public sector if the proposed IR35 reforms go ahead, research reveals.<\/p>\n
Four in five contractors had said they would turn down an inside-IR35 role and seek opportunities elsewhere.<\/p>\n
Currently, contractors who work under their own \u2018personal service company\u2019 are entitled to the tax breaks given to limited companies. The proposed changes to IR35 will be able to uncover these \u2018disguised employees\u2019 and tax them as if they were actual employees.<\/p>\n
The catch, however, is that even though they are paying tax like an employee, they would not be entitled to employee perks, such as sick leave or holiday pay.<\/p>\n
\u201cA typical contractor would have to increase his or her fees by 30 per cent to earn the same income if deemed to be inside IR35\u201d, said Dave Chaplin, CEO and founder of ContractorCalculator.<\/p>\n
Under IR35, the Government is set to lose out on \u00a3115 million in taxes, and would have to pay additional charges worth up to \u00a3610 million a year if they were forced to hire contractors on an employee pay roll, the research finds.<\/p>\n
But HM Revenues and Customs (HMRC) figures show that the reform will generate an added \u00a3400 million in tax from 20,000 contractors.<\/p>\n
\u201cHMRC\u2019s proposed reforms hang on the premise that contractors will readily accept having the same amount of tax deducted as employees, without receiving any employment benefits such as sick and holiday pay\u201d, said Mr Chaplin.<\/p>\n
He added: \u201cHMRC\u2019s na\u00efve conviction that contractors are going to roll over and accept these new conditions is going to have disastrous unintended consequences\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
A staggering 80 per cent of contractors plan on abandoning the public sector if the proposed IR35 reforms go ahead, research reveals.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1433"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1433"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1433\/revisions"}],"predecessor-version":[{"id":1434,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1433\/revisions\/1434"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}