IR35 reforms 'keep IT contractor demand static'

‘Static’ or at best ‘slightly improved’ is how IT contractor demand appears to be faring in the eyes of a professional staffing body.

In an update for February, APSCo said that appetite for technology skills on a freelance basis was down on last year by 8 per cent, a marginal lift from a 7 per cent dip in January.

But the number of temporary IT workers ‘in the field’ remains stubbornly in negative territory, with the “significant” 38 per cent slump in active IT contractors still holding firm.

“This is likely to be a result of significant changes around off-payroll working within the public sector,” the Association of Professional Staffing Companies (APSCo) said.

The association first made the link between the 2017 reforms to IR35 and the drop in active IT contractors in February, having previously pointed the finger at Brexit and Christmas.

Now it is going one step further, blaming the off-payroll reforms for creating “a climate where…former contractors are turning their backs on working through their own PSCs.”

However another staffing body, the Recruitment & Employment Confederation, said only last month that “the impact of the public sector changes is not yet fully known”.

But it did acknowledge “issues with implementation” of the April 2017 framework, as most of its agencies say it was done “badly”. The REC also criticised CEST as “not up to scratch.”

Speaking at the time, the confederation’s Tom Hadley also said: “It’s encouraging that the government has so far not brought forward a consultation on IR35”.

He explained: “We’ve been saying for a long time that introducing changes to IR35 in the private sector would be premature, as the impact of the public sector changes is not yet fully known”.

But according to APSCo data, the stock of IT freelancers on-contract plummeted by a third in November 2017, and it has kept in the red for four consecutive months, rising to 38% currently.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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