The new SDS process that has been adopted for contractors affected by IR35 continues to plague contractors, umbrellas, and even HMRC as the opening month of the rollout carries on.
This new legislation has been problematic from the first moment that it was mentioned as a possible way to recoup lost tax income. Experts have been trying to get the government concerned about the damage that this new legislation will impose on the contracting world since the early days of IR35 development. Still, the rollout went ahead anyhow despite these concerns.
Too Late To Change Now
Law firms have reported a huge uptick in cases related to IR35, and there is concern among experts that this will be the new norm as IR35 starts to take a toll on the contracting industry as a whole. Experts have sworn not to forsake contractors in the face of this predatory set of tax laws, but they seem to be the only people willing to help contractors now that the rollout has taken place.
Certainly, there is no support forthcoming from HMRC or the government to help contractors to make this new transition period smooth. Contractors have been forced to do all their own support for these changes and hope that they are doing the right things.
It is already clear that major engagers are cutting corners in an attempt to help themselves to save money and to get around some of the more difficult of the IR35 rules. Things like blanket determinations are making life very difficult for contractors, and the rollout falling on top of the pandemic and the reduced UK economy are not making things any easier.
For those who thought that the government would support contractors during the pandemic, the proof is in the pudding. The government has never done anything to take care of contractors since the pandemic began, and there is no sign that any help is forthcoming now.
Experts have complained that there is a vast amount of time and energy being put into educating contractors and end-users and no support at all from the government to make this easier. The faulty CEST tool continues to be used in place of better assessment tools, and umbrellas are becoming the only option for those who used to work through a PSC. The situation is dire and only getting worse.
Contractors Leaving In Record Numbers
As experts predicted, contractors are fleeing the UK to look for better work opportunities elsewhere. The lack of clarity in the new rules, combined with the failure of CEST and the chance that thousands in back tax might have to be paid by contractors due to errors that were made by end-clients, have made them want to get away from the UK as fast as possible.
The campaigning effort against IR35 fell on deaf ears, and now the UK will have to reap what was sown. There is no turning back now, and contractors can only hope that things will improve in the months to come as it becomes increasingly evident that IR35 is failing in every way possible.
