The IR35 legislation was originally introduced with the aim of tackling the issue of ‘disguised employment’, discouraging contractors from structuring their engagement with end clients in an overly tax-efficient manner with the added by-product of increasing the tax take. After many years of what HMRC regards as non-compliance of IR35, the announcement of new measures has sent shockwaves through the UK business landscape and has already kick-started an exodus of contractors from the public sector.

It is essential to mention at this stage that there have been no changes to the conditions that determine when IR35 applies, just to who makes the decision about whether the conditions are met. While IR35 legislation has been in place since 1999, the tax reforms announced in the 2016 Autumn Statement represent a significant loss of control for the individual worker. Whereas it is currently the responsibility of the contractor and their personal service company (PSC) to decide whether or not IR35 applies, from 6 April 2017 responsibility is shifting to the public authority engager.