I lived through the public sector IR35 rollout in April 2016 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 had the right contract and working practices anyhow.
At the time, I was working from my home office 4 days a week, my limited company had other concurrent clients, I provided my own equipment and managed teams up and down the UK with little detailed oversight and guidance (due to my awesome manager Diarmaid Crean who believed in empowering individuals to do a good job and deliver to outcomes. Thanks DC).
Qdos felt this arrangement was strictly outside IR35, so did the HMRC entity test. Evidence of both was submitted to PHE Finance. It wasn’t enough. So my company FD wrote a personal letter of assurance (letter of assurance attached FYI). It still wasn’t enough. So I then purchased a full “Public Sector IR35 Package” from Qdos which covered a detailed working practices questionnaire, which my manager kindly signed as confirmation of it being accurate (actual working practices questionnaire attached FYI). The finished “Pass” certificate was submitted to PHE as proof I was definitely outside IR35. I even got myself onto the CCS 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-core business delivery capability (ie. the digital transformation programme I was working on had stalled anyway given none of the programme funds had been released).
Postscript: government work has been 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 different government departments on this basis. Hiring managers seem better educated and I no longer have been treated as part and parcel of the organisation 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.
Frank Ray & Associates is a software engineering consultancy that builds high quality software for businesses.