The IR35 reforms – 12 months and counting

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The coronavirus has brought many changes to our working practices of late, one of which is a delay to the implementation of the IR35 reforms in the UK contracting sector. Right up to the eleventh-hour businesses were struggling with what the reforms would mean for them. Some had placed blanket bans on personal service company (PSC) engagements, while others were looking for potential workarounds. A few had been prepared to adopt the changes and had issued Status Determination Statements (SDSs) to their contractors. Whatever the case, it was clear that very few, if any at all, of the freelancers were happy with how the reforms were being managed by their clients and /or recruitment agents.

Despite the many man hours spent lobbying the government for a delay, salvation came because of the encroaching pandemic, and the implementation was postponed at the last hour until April 2021. So, what should business do to make the most of the next 12 months?

1. Act now. It became apparent through the 2020 “dry run” that waiting until the last moment to adopt changes because of the IR35 reforms was a terrible strategy. This resulted in the entire supply chain panicking and contractors prepared to walk away from their assignments — none of which needed to happen. With the correct preparation, businesses can continue to engage legitimate self-employed contractors through their PSCs after April 2021. They will also be able to transition contractors determined as “Inside IR35” to better suited engagement structures in a manner that suits all parties.

2. Review existing structures. It’s as simple as it sounds, but without knowing what you are working with, you cannot understand what you need to change. Do you have a handle on the number of contractors you are working with? Whether you are engaging their PSC or an umbrella provider? How long has each contractor been on the same site and/or assignment? Can the end client handle the contractor abruptly leaving the assignment? The list of questions are bespoke to each organization and there are no right or wrong answers but they will quantify the risks a business is facing because of the reforms. Continue reading here…

Via: The Staffing Stream

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