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IR35 REFORM © Getty images/iStockphoto

The impact of IR35 reform Matt Tyler discusses new research into the impact of IR35 reforms since their introduction in 2021 and what this means for the accountancy sector.

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Matt Tyler IR35 Consultancy Manager, Kingsbridge

he IR35 reforms were met with concern from many industries that rely on skilled contractors when they were introduced in 2021. One year on, it is clear that a continued lack of understanding around the new rules is stifling access to specialised talent which, in turn, is impacting businesses’ growth across the UK. Skilled contractor labour is essential for many industries across the UK, particularly during the ongoing skills shortages following the pandemic. According to IPSE data, contractors contributed £300 billion to the UK economy in 2021 alone (see bit.ly/3loQt5P). The accountancy sector is no exception, with many firms relying heavily on skilled contractors, alongside permanent members of staff. With this in mind, we were interested to discover the true impact of the IR35 reforms

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on the market. To find out more, we conducted research amongst contractors, recruiters and end clients – businesses that work with contractors – including organisations in the accountancy sector, asking them questions about their experiences over the last 12 months.

A changing landscape

The research revealed that IR35 has been the biggest obstacle to hiring contractors over the past 12 months for 50% of the end clients surveyed, coming in above the likes of Brexit and the pandemic, which have also had a disruptive effect on the market. In fact, over 70% of businesses and recruiters reported that they had seen a reduction in their limited company PSC contractor workforce. We found that end clients and recruiters are increasingly struggling to place contractors in ISSUE 123 | AIAWORLDWIDE.COM


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