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Research Confirms IT Contractors Leaving Public Sector

One subject I’ve talked about before is how IT contractors would be leaving the public sector once those unpopular IR35 tax changes came into force.

Well, it looks like I have been proven right, because new research has just confirmed that IT contractors are jumping ship and going elsewhere…mostly to the private sector where they are not subject to this IR35 madness.

Who can blame them though? At the end of the day, if you are getting money taken out of your pocket, which in your view is unfair, then of course you are going to down tools at the first available opportunity and seek out new opportunities.

The IR35 tax reforms came into effect during the month of April this year, and it means that IT contractors get taxed like an employee, which ultimately leads to a more expensive tax bill with some reports suggesting that it is costing 25% more than before. Not surprisingly, the vast majority of workers were, and are, outraged.

So what has the new research found out about IT contractors, the public sector and IR35? The first statistic that caught my attention is that 71% of those surveyed admitted that their income had taken a hit since the new tax changes.

A third of that 71% mentioned they now take home 15% less in their pay packet, while a further quarter said they were getting 25% less.

Out of the 1000 IT contractors surveyed, half said they had already or were planning to leave for the private sector, while 75% said the private sector is the place they would most like to be.

Who can blame them? In my opinion, there has never been a better time than right now to find an IT contracting job in the UK. Many companies in the private sector are actively looking for a wide range of skills, and if you have the talent, then you should be taking home a nice bit of change every week.

Not everybody agrees though, as the survey went on to show that 6% said they were sticking with their IT contracting jobs in the public sector and it was the best place to be.

I’m sure that some people didn’t get affected as much by the IR35 tax changes, and this is why they are content to keep on working in the public sector.

Recruiters have also had their say, with 77% saying that the private sector was now the most desirable place for IT contractors and 59% admitting that digital skills were lacking in the public sector.

This has led many experts to say that project delivery is now a concern within the public sector, and that a lot of projects will never see completion

Just look at the whole “making tax digital” saga as a perfect example of this. For a few years now it has been in the works, and then, unexpectedly, it was scrapped. Perhaps they no longer have the IT skills to make it happen? Who knows for sure.

What I do know that is many IT contractors are now moving boldly forward to a new and exciting life in the private sector, where more opportunities and money awaits them.

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