Qdos' Public Sector Survey Results

20th July 2016
Written by Qdos Contractor

Public sector guidelines are under the spotlight again for the fourth year running

The most recent developments - pencilled in to be applied from April 2017 -  which puts the engager (or agency) in control of the contractors’ IR35 future - are clearly cause for concern and not just for public sector contractors, but possibly for all private sector contractors too (as suggested in the IR35 consultation last year).

The new guidelines proposed would give engagers the responsibility of deciding whether or not the contractors they use are IR35 compliant or not. They could be required to complete a new online tool, similar to the Employment Status Indicator (ESI) tool currently on HMRC’s website, to determine whether or not IR35 applies to them.

From our experience over the years of dealing with various clients and agencies, this could be problematic, both for the contractor and the engager themselves. Public sector bodies, and agencies who have not needed to care about IR35 in the past, would now need to take an active role in determining whether the Intermediaries Legislation applies to each contractor. It is likely that engagers will take the easy way out, and simply apply IR35 or stop using limited company contractors as part of their flexible workforce altogether. Contractors will also likely be deterred from taking contracts where IR35 is forced upon them.


We conducted a survey to find out what the contracting industry thought about the new public sector guidelines

 It is clear to see that contractors are not pleased with the proposed changes; here are some of the comments we received in response to the question, “How do you think the proposed changes will impact your business?”


  • “Whilst I haven't had public sector contracts (yet), this could saturate the private sector contract market increasing competition for the available roles. Additionally, the public sector would likely suffer.”

  • “Improperly force me to operate IR35, even though I can demonstrate that I'm properly operating outside IR35”

  • “Remove freedom to choose public clients, make working for public clients not profitable. I would be paying tax and NI but not get employees benefits”

  • “It is not clear yet. But once it is imposed on public sector, private sector will follow suit”

  • “I cannot see how anyone, but very large agencies such as Hays will be able to cope. This will utterly destroy the SME segment operating in the public sector.”

  • “Engagers will be much more cautious about offering contract work and are likely to engage inside ir35 by default…Public sector organisations are reactive by nature and contractors support these bodies to remain agile and responsive to policy changes and other organisational pressures - reducing access to such a flexible source of support and expertise will be damaging to public sector performance in the long run.”

  • “Risk averse public sector clients will default to "caught by IR35" - this would reduce our profit margin to unacceptable levels and we would no longer take on contracts with the public sector”


It is not just contractors that are concerned about the new guidelines, if this was to be implemented across the board, it could prove burdensome for engagers and agencies alike. We will not know which way it will go for sure until the Autumn Statement 2016.

Qdos Contractor
Written by
Qdos Contractor
Award-winning providers of insurance for the self-employed, Qdos are the leading authority on IR35, offering industry-leading employment status services to ensure the flexible working industry thrive. Qdos are the Best Contractor Insurance Provider 2022 and won the Queen’s Award for Enterprise in Innovation 2022 and 2017. 

Have a question?

Ask away! One of our team will get back to you!

Prefer to talk to us in person?

Call our team on 0116 269 0999 or we can call you back at a time that suits you!