This year's IR35 rule changes in the public sector have resulted in a reduction in the available talent pool and wage inflation. The tax rules are expected to be introduced into the Private Sector by 2018.
To-date there is a clear upward movement on rate requirements from contractors when pricing new public sector assignments, as well as for those with ongoing assignments that fall inside IR35, of up to 25-30%*. If the same impact was replicated in the private sector, the costs of managing contractors / consultants will increase, we would face skills shortages - all this would have a direct impact on our international competitiveness - hence impacting not just profitability but crucially organisations viability.
Will this expected move be a complete disaster for businesses and contractors alike?