IR35 mismanagement threatens UK’s £3.5bn plan to become tech ‘superpower’
Trade unionists and freelance service providers call out the government on the mismanagement of IR35, its stifling impact on tech companies and the freelancers they desperately need to grow
After British trade unionist Mick Lynch criticised the IR35 legislation for contributing to strike action that threatens the energy transition, the mismanagement of IR35 looks like it will put other key projects at risk – including the government’s Quantum Strategy to make Great Britain a science and technology superpower in the next decade.
Responding to planned industrial action among North Sea workers, Secretary-General of the RMT, Lynch, said “imposing conditions such as IR35 on all offshore workers” is one of the factors leading to walkouts, jeopardising the UK’s energy transition.
IR35 specialists, Qdos, have praised Lynch for highlighting the issue and warned that the £3.5bn committed by the government over the next ten years to turn the UK into a science and technology ‘superpower’ is “money down the drain” if IR35’s flaws aren’t addressed.
IR35 is putting Quantum Strategy at risk
In the Spring Statement, it was announced that around £1bn will be invested in developing the next generation of supercomputing and AI research, with £2.5bn committed to the government’s ‘Quantum Strategy’, which is designed to bring new investment, fast-growing businesses and high-quality jobs to the UK through quantum technologies.
Quantum computing can provide the power needed to run complex algorithms which is crucial for artificial intelligence (AI). However, AI needs immense data processing manpower, which takes highlight skilled talent and money.
“Mick Lynch is right to press the point – the government’s attitude towards and handling of IR35 could easily threaten the energy transition,” said Seb Maley, Qdos CEO. “The same goes for the UK’s aim to become a science and technology superpower,” he said.
Failing to address the IR35 legislation’s fundamental flaws and £3.5bn might as well be money down the drain.Seb Maley, CEO, Qdos
“The IR35 legislation remains fundamentally flawed. IR35 reform has resulted in genuinely self-employed contractors being forced into zero rights employment, while HMRC’s very own tool for assessing IR35 status is hopeless.
HMRC double taxes IR35
“What’s more, HMRC double-taxes IR35, which means businesses are overtaxed if they are found to be non-compliant,” said Maley.
Maley reiterates that rather than encouraging firms to engage contractors, IR35 does the complete opposite.
“If organisations, including government departments, aren’t in a position to manage these rules properly – something which would be made easier if the legislation was actually fit for purpose – they lose access to highly-skilled, flexible workers, who hold the key to delivering key projects,” he said.