The IPSE is launching a new campaign to wake up Westminster to the perils of IR35 reforms
The UK workforce is on the precipice, and Westminster isn’t acting fast enough
OPINION
Britain’s workforce is suffering. Unemployment is rising. Living costs are soaring. And finding work that actually pays the bills? Nearly impossible.
Take cleaner Mulikat Ogumodede as an example. For 16 years, she worked 17-hour days just to make ends meet. She grafted day shifts at Deutsche Bank—8 am to 5 pm—then headed straight to night shifts at the Houses of Parliament, 10 pm to 6 am. Five days a week. From 2008 to 2024.
Her crime? Not telling her employers. They were “shocked” to discover her secret double life. She’d “deliberately” failed to disclose it, they said. The mother was simply trying to support her family.
But what happens when more people made redundant turn to solo self-employment? Back in 2008/9 post-global mortgage crisis, it was promising. But in 2025? It’s downright confusing, unnecessarily complicated and frustrating.
Why Britain’s freelance workers are at breaking point
Landing freelance work in Britain now feels like winning the lottery. The job search has become a maze crammed with desperate competitors. And even when you do find something, there’s no guarantee it’ll cover the mortgage—let alone everything else. You might have to take an “Inside IR35” job for less pay, and also cover your own expenses and pay an umbrella company to handle your salary payments.
We’re in a new artificial intelligence era that supposedly is going to generate millions of new jobs. So, why is landing freelance work so hard?
How IR35 reforms have destroyed self-employment
The UK’s flexible workforce is “at a breaking point,” says Fred Hicks, Senior Policy and Communications Adviser at IPSE, the self-employed association. The culprit? Off-payroll working rules, better known as IR35 reforms.
These rules were meant to create “fairness in the tax system.” Instead, they’ve unleashed “a wave of high-cost, zero-rights employment,” Hicks argues. Confidence has collapsed among clients and contractors alike.
Westminster’s failure to address the UK labour market crisis
Westminster hasn’t noticed quickly enough. The result? A full-blown labour market crisis looms: mass unemployment and plummeting Treasury revenues.
Redundancies have pushed professionals into self-employment. But demand isn’t keeping pace. Off-payroll rules and higher employer national insurance contributions have strangled the market. Now it’s “saturated with more professionals competing for fewer outside IR35 roles, at lower rates of pay,” says Hicks.
Hidden cost of Off-Payroll working rules on professionals
The human cost is staggering. Undermined, unengaged, and unemployed professionals are suffering. People are raiding their retirement funds—at the peak of their careers, when they should be earning the most.
Keith Webb, a Director at Aiden Associates, relayed in a LinkedIn comment his recent experience of what is happening in the UK labour market:
I met up, socially, with three friends last month and in the gap between our get togethers all three had given up and ceased looking for work. All are using their savings to get by, mostly drawing down their pensions.
They’re not daft and recognise that they may well be storing up trouble for later years but feel that there is nothing to be done with the state of what we loosely call political thinking.
In the same comments feed in response to Hick’s campaign announcement, Rik Anderson, an embedded systems specialist at RA Embedded Systems Limited.
My company will have to close before the end of the year. I have paid no tax this year as I have earned no money yet still have to pay for running my business.
This means I will also be cancelling all business expenditure so less tax paid by accountants, insurance companies etc. I can’t help feel the IPSE has also failed in its purpose and will have to close when we are no longer paying membership.
Hicks is convinced the IR35 reforms have “made life disproportionately difficult for independents and left thousands of skilled professionals wondering what future remains for them in the labour market.”
Self-employment in 2025: Why finding work feels impossible
Clients also face a dilemma with rising employment costs and the risk of “a potential HMRC investigation into their off-payroll arrangements.”
This, according to the IPSE communications advisor, has encouraged “counter-productive blanket approaches to contractor engagements” or avoiding contractors entirely, favouring UK or non-UK consultancy firms instead. Hicks notes that “clients lack the confidence to engage contractors in a way that is compliant but also fair to all involved.”
The developments are also hitting organisations such as IPSE hard. The most visible consequence is the “disappearance of genuinely self-employed, outside IR35 opportunities,” which have become “so rare as to feel almost mythical.”
This has caused long-term contractors to be out of work for much of 2025, feeling their “professional, independent identity they worked hard to build over many years has been undermined by the shattering of the contract market.”
Hicks criticises Westminster’s silence and single-minded focus on “additional tax revenue the off-payroll reforms are purported to raise,” suggesting much of this revenue is from “overcompliance” with the rules by clients.
IPSE’s position is clear: “The off-payroll rules are broken, and they must change.” Hicks, in a statement, concludes with a strong call for ministers to “acknowledge the damage, work with the sector rather than against it, and help fix what their predecessors have broken.”
IPSE plans to launch a coordinated campaign leading up to the Budget to push the government to address the issue.
