The IR35 changes have had contractors complaining and moaning, there is no doubt about that…but should they all leave the public sector? Maybe not.
This is what one specialist accountant is saying anyway, who has recently gone on record to suggest that independent contractors who are currently working within the public sector should take a more “pragmatic” approach to the situation.
In other words, don’t rage all out war against IR35. Instead, try and find ways you can make it work in your favour.
The accountant went on to add that he acknowledges the fact that recent IR35 changes are probably the “most hated legislation” within the public sector contracting industry, but, contractors must remember that when the original IR35 legislation was introduced 17 years ago there was actually some benefits associated with it. In his opinion anyway.
More specifically, it was of benefit for loyal public sector employees who suddenly started to realise that the contractors they were working side by side with…well, in many situations those contractors were making more money and paying significantly less tax.
Many pundits over the years have claimed these contractors in the public sector are basically using special circumstances as a tax dodge, which isn’t fair at all, and that is why we have finally seen the recent IR35 changes in an attempt to level the playing field.
It might not be going how they expected though, because as I’ve reported about before, rather than sitting down and simply accepting these new changes, there are many contractors who are downing tools with the public sector and looking towards the private sector for better opportunities.
There are many who have already made the move, with thousands more expected to join them before the end of 2017.
This isn’t a temporary move either, because according to many public sector insiders what they are saying is the IR35 changes are going nowhere soon.
However, this particular specialist accountant reckons that contractors should not be totally against the IR35 changes, and in fact, if they were to get the right mindset about this whole situation then they could use it in their favour.
He suggests that contractors should not knock out IR35 completely, and instead, view working within the confines of IR35 as a “necessary evil” to get what they want.
What do contractors want, especially those in the public sector? According to the accountant it is NOT more money. Oh no. It is more flexibility in the way they work, which means that working with the IR35 changes as a self employed contractor, even if it means paying more tax, could give them the flexible lifestyle they require.
I’m not too sure about this one. Yes it is something that every contractor wants…flexibility that is, but should it come at a cost of paying more tax, which in many experts view is unnecessary and unjust? Especially when you consider that there is more than enough opportunities in the private sector, where there isn’t any IR35 madness but the same amount of flexibility is usually on offer.