Vast majority of contractors to fall outside of IR35

Nearly nine-tenths of contractors fall outside of IR35 which is the exact opposite of what a partner at Baker Mckenzie a multinational law firm said at the end of 2019.

According to Qdos, a company that offers insurance and tax advice for the self-employed, Status Review tool found that 87 per cent of contractors who used it to receive an IR35 status, were deemed to fall outside the legislation.

Stephen Ratcliffe, partner at Baker Mckenzie a multinational law firm told HRreview back in December 2019 that 90 per cent of contractors are inside the IR35 rules and will be affected by them.

Also, all “big four banks” in the UK have reacted to the run-up to IR35 in the same way and placed a blanket ban on the use of contractors. 

Presently, over 2,200 recruitment agencies and hiring organisations state they are ready for the implementation of IR35 in April 2021.

On 18/06/20 agreement was reached by MPs at the Committee stage of the Finance Bill amendment, leading to the rollout of IR35 in April 2021.

Seb Maley, CEO of Qdos, said:

While needless and short-sighted, IR35 reform is manageable if businesses take a measured approach to the changes. As disappointing as it is that these changes are going ahead, it’s positive to see that thousands of recruiters and hiring organisations are prepared to do the right thing and prioritise accurate status decisions. This will ensure genuine contractors can be engaged legitimately outside IR35 beyond next April.

Now, with less than a year until the changes arrive in the private sector, it’s vital that companies yet to start preparing do so immediately. Meanwhile, firms banning contractors, forcing them onto the payroll as a workaround to the changes, should rethink their stance on IR35 reform.

So far 9,000 contractors have had their IR35 status administered via the Qdos Status Review tool.





Darius is the editor of HRreview. He has previously worked as a finance reporter for the Daily Express. He studied his journalism masters at Press Association Training and graduated from the University of York with a degree in History.