The Impact of IR35 in the Project Management Domain

During the early weeks of November, Arras People ran a survey to see if we could better understand how the changes to the Off-Payroll Workers legislation (IR35) which were introduced into the Public sector in April 2017 have impacted project management practitioners; we also asked practitioners working in the Private how they feel it could impact them, should its roll-out feature in the upcoming Budget.

We had responses from 609 people, which included a mix of those responsible for hiring as well as practitioners from both the Public and Private sector and we thank them all for contributing their views and experiences on this important topic.

Based on these responses we have created a report which summarises the data on IR35 and its impact in the Project Management Domain, which we believe offers a unique view to put against the many generic or agenda led opinion pieces that have been created on this subject to-date.

The report highlights topics including:

  • Many project management practitioners are feeling the pain of lost income and additional taxation due to the implementation of the Off-Payroll Workers legislation in the Public sector.
  • Many Public sector practitioners have migrated to the Private sector since April 2017, increasing competition for available assignments.
  • There is a wide concern amongst many project management practitioners that a further roll out of the legislation across all sectors would have a significant impact on the livelihoods of many and at the same time severely hamper UK PLC from remaining competitive
  • Some practitioners suggest that a brain drain is happening as practitioners with mobility leave these shores to work in roles that recognise and pay for their talents and skills under a fairer tax regime.
  • There is widespread concern regarding the use of “blanket decisions” in the Public sector implementation of the new rules, which are seen as both unfair and outside the spirit of the legislation.
  • The winners seem to be the Umbrella companies, many of whom are picking up practitioners who feel they are being corralled into using their services if they want to keep or take on new assignments.

Phase one is complete; though it would appear that there is still much to be done to stabilise operations in the Public sector that have been impacted by the new legislation and to right the perceived unfair treatment that many practitioners feel they have been subjected to.

IR35 Project ManagementA levelling of the playing field is being called for, though how that should be achieved varies depending upon who you speak to. The Treasury and HMRC see this as being achieved through a roll out of the legislation into the Private sector; whilst many groups representing the workers would prefer that the levelling be achieved by rolling back the legislation or halting its spread until some of the issues are resolved.

The budget to be delivered by the Chancellor on the 22nd November 2017 will give us some answers about the direction of travel but with perceived low hanging fruit estimated at £1BN of additional tax take it is hard to see past a full roll out.

Whatever happens, there are issues to be sorted which will surely contribute to the discussions already started in the Taylor review of “modern working practices”. Executed correctly, this could redraw the future for Freelancers/Contractors and allow their value and contribution to the endeavours of UK PLC to be recognised. A situation, which would be much healthier than that which we see at the present time where some feel confident enough to call them all “tax dodgers”?

The report can be accessed here:

Arras People IR35 Study




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