IR35 threatens UK’s £3.5bn plan to become tech ‘superpower’

After Mick Lynch criticised the IR35 legislation for contributing to strike action that threatens the energy transition, the government has also been warned that mismanagement of IR35 puts other key projects at risk – namely, the plan announced in the Spring Statement to make the UK a science and technology superpower in the next decade.

Responding to planned industrial action among North Sea workers, Secretary-General of the RMT, Lynch, said “imposing conditions such as IR35 on all offshore workers” is one of the factors leading to walkouts, jeopardising the UK’s energy transition.

IR35 specialists, Qdos, have praised Lynch for highlighting the issue and warned that the £3.5bn committed by the government over the next ten years to turn the UK into a science and technology ‘superpower’ is “money down the drain” if IR35’s flaws aren’t addressed.

In the Spring Statement, it was announced that around £1bn will be invested in developing the next generation of supercomputing and AI research, with £2.5bn committed to the government’s ‘Quantum Strategy’, which is designed to bring new investment, fast-growing businesses and high-quality jobs to the UK.

Seb Maley, Qdos CEO, said: “Mick Lynch is right to press the point – the government’s attitude towards and handling of IR35 could easily threaten the energy transition.

“The same goes for the UK’s aim to become a science and technology superpower. Fail to address the IR35 legislation’s fundamental flaws and £3.5bn might as well be money down the drain.

“The IR35 legislation remains fundamentally flawed. IR35 reform has resulted in genuinely self-employed contractors being forced into zero rights employment, while HMRC’s very own tool for assessing IR35 status is hopeless.

“What’s more, HMRC double-taxes IR35, which means businesses are overtaxed if they are found to be non-compliant. Rather than encouraging firms to engage contractors, it does the complete opposite.

“If organisations, including government departments, aren’t in a position to manage these rules properly – something which would be made easier if the legislation was actually fit for purpose – they lose access to highly-skilled, flexible workers, who hold the key to delivering key projects.”

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IR35 threatens UK’s £3.5bn plan to become tech ‘superpower’