I lived through the public sector IR35 rollout in April 2017 and this is my story.
The lead up to the rollout started out as generally a minor annoyance which ramped up week by week, until things were at fever pitch for everyone involved (the industry, public sector bodies, contractors, consultancies, suppliers working through G-Cloud, hiring managers etc). I wasn’t too worried as I had contracted outside IR35 for many years and believed I was doing the right things anyhow.
At the time, I was working from my home office 4 days a week, my ltd company had other concurrent clients and a second employee, I provided my own equipment and managed teams up and down the UK with little detailed oversight and guidance (due to my awesome end client, Diarmaid Crean who believed in empowering individuals to do a good job and deliver to outcomes, rather than micromanage them. Thanks DC)
Qdos assessed this arrangement to be outside IR35, so did the HMRC entity test. Evidence of both was submitted to PHE Finance. It wasn’t enough. So then I purchased a full “Public Sector IR35 Package” from Qdos which covered a detailed working practices questionnaire which my end client kindly signed as confirmation of it being accurate (document link), even though the way we worked in his department was counter to the rest of the organisation. The Qdos “Pass” certificate was submitted to PHE, along with a personal letter of assurance (document link) written by the FD of my company, as proof that my engagement was definitely outside IR35. I even got myself onto the DOS2 framework as a contingent procurement route if for some reason all other efforts failed.
Needless to say, my contract with PHE was terminated just prior to the rollout. No formal notice was given in writing, nor was any explanation offered. We were simply told any invoices submitted after a given date would not be paid.
In hindsight, I suspect PHE might have made use of the IR35 “gift horse” to heavy handedly reduce FTE’s, contactors, consultants etc and improve their cashflow whilst accepting a temporary reduction in their non-business delivery capability (re: the digital transformation programme – it had stalled anyhow given none of the programme funds had been released anyway).
Postscript: life was much better after the public sector IR35 rollout and there have been a good number of outside IR35 contracts offered either through frameworks (like DOS) or indirectly through management consultancies. In the last 2 years I have worked for 5 government departments. Hiring managers seem better educated and I no longer have been treated as part and parcel of the furniture when doing these jobs (although the length of role I have personally experienced has been much shorter on my CV).
Perhaps there was a blessing in all this for those who genuinely want to freelance. I do wonder if the private sector rollout will be as good for freelancers as the UK public sector one was.
Did you know successful projects depend upon healthy relationships between the people involved? Trust, honesty and openness are required so that problems and issues can be frankly discussed and nipped in the bud. This is how we conduct business at Frank Ray & Associates, a software engineering consultancy I founded. You can also reach me directly at email@example.com