IR35 and its impact in the Project Management Domain

A study from Arras People – November 2017

In April 2017 the rules around Off-Payroll Workers (IR35) were updated for workers engaged in the Public Sector. The most significant change moved the point of determination (and liability) for IR35 status from the contractor delivering the services, to the engaging client. Any decision of In-Scope places an obligation on the party paying the worker (Engaging client, Agency, Umbrella), to ensure that PAYE, National Insurance and Employers National Insurance are collected at source and paid to HMRC through their payroll systems. These workers took on a new status “deemed employee” being taxed as if an employee, without gaining any employment rights.

The changes were opposed by many groups who have an interest in the supply chain which provides contingent labour and organisations which support the activities undertaken by professional contractors. Many suggested that the introduction would be catastrophic and lead to a seizure in activity across Public Sector bodies as contractors either left for the Private sector, retired or moved abroad.

Seven months on, the claims and counter claims continue about the success or otherwise following the implementation. With the HMRC and Treasury claiming a great success, worries are now increasing that the playing field is about to be levelled and the changes will be pushed into the Private sector.

With this in mind, we decided to ask our community of Project Management practitioners how they have been impacted by the changes and their concerns for the future. This report contains their responses.

The report considers the responses from 600+ Programme and Project Management practitioners in the UK about the impact of the Off-Payroll Workers Legislation in the Public sector and their views should it be rolled out into the Private sector.

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