Has IR35 killed the freelance market?

IR35, the brainchild of Gordon Brown in 1999 with the plan to counter avoidance in the area of personal service provision, stopping disguised employment. IR35 became law in April 2000 but has been criticised ever since.Various judicial reviews and petitions did not revoke the act. The tax collected in 2015 was around £430m – this was not satisfactory for the then government so they raised the possibility that clients, rather than contractors, would be tasked with determining IR35 status. In December 2016, the then government released provisions to clamp down on tax avoidance using ‘off-payroll’ workers in the public sector. So, in 2017 public sector bodies were responsible for the IR35 status.Despite widespread condemnation, the rules were extended to private sector in 2020 (delayed by COVID until April 2021).This issue has caused many a freelancer to now pay PAYE. Many I know refuse to work inside IR35. Only looking for work outside the rules. Smaller companies and or/remote.

I have always argued that freelance should be a temporary assignment. No longer than a few weeks, covering for sickness or filling a gap while awaiting a new staff member – IR35 seemed a wise idea to me.I have never been inside IR35. Working for multiple companies at teh same time, on multiple projects seems the most logical way to work as a business, after all, if you want to be at the same company day-in day-out then get a permeant job, leave the proper entrepreneurs to do the freelance professionally.Has IR35 killed the freelancer? Unfortunately, not, there are still people that chose this way of working just so they can increase their turnover and ‘off-set’ tax.

There are in my opinion two type of freelancer: the good ones and the unemployable. Be careful which one you chose and always ask for evidence of IR35 status. My gauge, if they can work on site for 6 weeks, they should be inside IR35. I run a business, I have long-standing clients, multiple jobs on the go at any one time. I charge by the job, not by the day. Estimate, invoice – i guess I'm just old fashioned.