The House of Lords Finance Bill sub-committee has urged the Government to reform the off-payroll rules, also known as IR35, as it launches a fresh inquiry into the rule changes in the private sector.

Following the launch of the new investigation, Lord Bridges of Headley, who chairs the sub-committee, has called on the Government to undertake a “wholesale reform of IR35” due to it’s impact on contractors and companies.

He said:“Our previous inquiry found the Government’s off-payroll working rules to be riddled with problems, unfairness, and unintended consequences. We called for the wholesale reform of IR35.

“We’re carrying out this follow-up inquiry to find out about the experiences of engagers and contractors to date. We want to hear particularly from representative bodies about the experiences of individual contractors.”

The new inquiry is a sequel to the sub-committee’s previous report, Off-payroll working: treating people fairly, which revealed “inherent flaws” with the off-payroll rules.

To get a better appreciation for the impact of IR35, the Lords committee has called for evidence from professional bodies, businesses and contractors.

Responding to the new inquiry, Andy Chamberlain, Director of Policy at IPSE, said: “The impacts of the IR35 changes in the private sector, implemented earlier this year, are already being felt.

“We have seen drastic shortages among HGV drivers and we know from IPSE’s research that many contractors in other sectors have closed their businesses as a result. We are, therefore, delighted the draft Finance Bill sub-committee will look at this issue in a follow up inquiry.

“The committee’s report prior to implementation was damning of the reforms, yet was largely ignored by government. We hope policy makers will pay more attention this time around and IPSE will certainly respond to the call for evidence.”