New research into the impact of the changes to the IR35 tax legislation has revealed that confidence levels among self-employed contractors have fallen drastically due to it, with many quitting.

This research was conducted by the Association of Independent Professionals and the Self Employed (IPSE), and it shows that one third of contractors have abandoned freelance working since the rules were changed. IPSE spoke to 754 of these workers from across the UK for this study, with the results making sobering reading for HMRC.

Despite the fallout from both Brexit and Covid-19 during the past two years, more than 70% said that the changes to IR35 had caused the most negative effects on their finances. A further 40% said that it made them feel less optimism about their chances for next year.

Although they must comply with the new rules, consulting accountants in Goole or elsewhere with genuine IR35 expertise may help some of these firms feel happier about them.

A fifth of the self-employed workers that took part in the survey told IPSE that they are thinking about going back to being employees due to a combination of IR35 and the pandemic.

IPSE CEO Derek Cribb told Consultancy UK that:

“While headlines continue to focus on the pandemic, Brexit and supply chains, it is clear from the IPSE Confidence Index that there is only one issue dominating the lives of freelancers: IR35.”

Cribb added that it had left many of them feeling unsure about the future and opting out of self-employment.