Originally written by Stephanie Spicer on Small Business
Many UK sole traders are making plans to address the impact of proposed off-payroll reforms (also known as IR35) – where contractors must pay employment taxes without the equivalent of employment rights – even though the legislation will not affect them.
Not only are 18% of sole traders making unnecessary preparations for when off-payroll reforms hit the private sector in April 2020 but 13% of limited company contractors said they will stop contracting as a direct result of the planned reforms. This would be equivalent to losing 78,000 people from the contracting workforce, based on estimates of there being 600k personal service companies in the UK, carried out by the Freelancer & Contractor Services Association (FCSA) which undertook the research with accounting software provider FreeAgent.
The FCSA believes its research findings should be a warning to the Government that off-payroll reforms will put medium and large-sized businesses under continued pressure – ‘and that the UK economy cannot withstand another hit in an already tight labour market’.
It says firms are already struggling to fill their staff vacancies, as recorded in the Chartered Institute of Personnel’s Labour Market Outlook report and that a depleted contractor workforce able

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