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Research highlights negative impact of IR35 reforms

Research highlights negative impact of IR35 reforms

Anybody with an understanding of IR35 could have predicted the destruction now being seen in the public sector.

Handing the power over to the public body to decide whether a contractor is inside or outside IR35 hasn’t worked. Blanket decisions are being made regarding worker status – often inaccurately.

As such, drastic measures are being considered by many workers according to new research from the Independent Health Professionals’ Association.

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A recent survey from the association gauged some of the sentiment among independent healthcare workers in the UK. It’s clear that cuts to take home pay and working freedom is having a massive impact.

An astonishing 98% of respondents said they would consider seeking work outside the NHS due to the reforms.

Further findings from the report indicate that 70% said they would contemplate taking up positions with private UK healthcare providers if they became available.

32% would also consider a position in another EU country to avoid the gripes of IR35.

Staff shortages

The damage isn’t exclusive to the workers themselves. As many leave to take up more beneficial positions, staff shortages are starting to bite. Add government cuts into the mix, and you start to understand why the NHS is in the crisis it is.

“It’s highly troubling that certain NHS Trusts are pushing ahead with their unfair implementation of the IR35 rule, which leads to locums being falsely classed as inside IR35 due to blanket and incorrect, implementation of the IR35 rules, with them subsequently losing up to half their income,” said Ben Itsuokor, consultant geriatrician and president of the IHPA.

He adds, “Distressingly, stories have now emerged revealing that vulnerable locums are being encouraged towards unsustainable, questionable tax arrangements which could leave them facing life-changing tax bills long-term. This, coupled with the ongoing NHS crisis, looks set to drive a backlash of locums leaving the service, and even the country, due to contract work becoming economically unviable, creating severe staff shortages.”

It beggars belief that the government persevered with this move, and expected everything to come up roses. They really have made a rod for their own back. They're now having to think on their feet while one of the country’s most valuable resources sits in the doldrums.

Surely factors such as this must be put forward as evidence not to move IR35 reforms any further in the private sector. If they impact UK industry the way they have the UK’s health service, the consequences could be disastrous.

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