HMRC continues to smear the facts to hide its own IR35 failings.
By Dave Chaplin CEO ContractorCalculator.
The release of our IR35 Report last week certainly ruffled a few feathers. Our detailed survey of over 1500 contractors spelt out to HMRC just how their IR35 reforms had devastated the public sector.
We revealed how the 600 contractors who were actively working on public sector contracts as the reforms came into play were affected, and our findings merely reinforced what we had been hearing since April 2017. For those who haven’t read the full report here are the headline stats:
- 76% of public sector departments lost highly skilled contractors
- 71% of projects were delayed or cancelled
- 27% of public sector contractors left after the reforms went live
- 38% of contractors couldn’t be replaced
- 24% of projects lost at least half of their contractor workforce
And so with all these detailed and accurate figures out in the public domain, how do HMRC choose to react?
An HMRC spokesman said: "The survey is based on an unrepresentative sample. There is no evidence of a drift from the public sector and no delays to IT projects due to the new rules. There is no change to contractor pay other than to make sure the correct tax is paid."
How is the data unrepresentative when we asked the actual people, on the actual projects, in the actual public sector?
Then they claim that despite the now overwhelming evidence from IT contractors both from our survey and from multiple sources that “No one left the public sector, no projects were affected”.
And the denials get even worse.
Despite many contractors telling us that they got pay rises to stay, and recruiters telling us that rates have increased to retain contractors, they claim that no pay to contractors has changed...
We even have contractors who have told us about the empty desks at HMRC itself, in particular on the Making Tax Digital project. So whilst they may be blind to what is going on in other public sectors, in their own bubble at HMRC towers, department heads would have to be wearing blindfolds not to see the damage done.
But, this isn’t the first time they have attacked us as at source, and it won’t be the last even though each and every time they claim “we’re wrong”, “we can’t possibly know”, that “we don’t have access to the data,” we quickly and easily prove them to be the ones making it all up.
So what do all contractors and heads of business have to do next? Lobby.
As IPSE have recently reported, HMRC made comments at a recent IR35 Forum indicating that they consider the IR35 reforms a success. Unbelievable right? Our next response needs to be lobbying MPs so they understand the damage HMRC are doing with these reforms. And if we don’t, then you can bet your house on these reforms being rolled out to the private sector sooner rather than later.
If you’d like to use our free template to Lobby your MP we have one here.
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About Contractor Calculator - We’ve been online and independent since 1999. Still owned by founder and former IT contractor Dave Chaplin, the business has grown dramatically since then to become the expert guide to contracting. The team have created a free independent IR35 testing tool to enable contractors and agencies to ascertain their IR35 status. Developed with input from employment law status experts, the IR35 Test was first released on ContractorCalculator in 2009 and has already been used by over 100,000 contractors. To reduce your risk of investigation and tax liabilities visit www.IR35testing.co.uk to take your free test now.
Power BI Dashboards, Data Analyst, NHS Information Analyst, Public Health Analyst, Crystal Report/BOXI Developer
7 年Some Public sector clients who are serious about obtaining good quality contractors have had to up rates by 50% because of IR35. Most, unfortunately, aren't suitably motivated to maintain quality and contracts are either going unfilled or the "pay peanuts you get monkeys" rule applies.
Director at Stewart Management & Planning Solutions Ltd
7 年So, does HMRC have independent data that supports their assertions?
Regeneration Director and Innovator
7 年I think this is a case of turning a Nelsons Eye to a self made problem. Perhaps we need to challenge the inequality of a system designed to target one group of workers just because they work in the public sector. Essentially, Animal Farm in another guise!
Available-Interim Director of Procurement/Head of
7 年It is shameful that HMRC remain in denial. I for one would be overjoyed if the Public Sector did not employ any interims or contractors. However they choose to not recompense to get the skills, experience and talent required. The PS is littered with failed or over run and over budget programmes. Wake up and smell the coffee; recruit and pay for your own skills or contract and pay for the external support. You need to recognise that skills, talent, experience and results come at a price; YOU GET WHAT YOU PAY FOR!
Operations capability & organisational change specialist. Now retired.
7 年When bad legislation meets incompetence there are never any winners. It's not just IR35 it happens time and again with different policy decisions. Government reliance on national averages and targets related to same etc is stifling innovation across the public sector. Everyone loses out, services cost more than they need....