IR35 rule changes – creating a two-tier system

The concession introduced into the IR35 changes in regard to small companies is creating a significant amount of hassle and annoyance for those engagers of contractors whose turnover exceeds these criteria. In sectors where there is a shortage of labour there is a clear desire with contractors to seek to work for end clients who fit the small company definition so they can continue to trade without being affected by the IR35 revisions.

In fact this idea appears to be promoted by some intermediaries who may be rattled by the fact that contractors who have historically been told by their advisers that they are outside the scope of IR35 are informed by a status determination statement (SDS) from their end clients that they fall within IR35. It seems an easy answer for these contractors to carry on with the status quo and address this in their self-assessment returns....