The government has finally launched a review into the changes to IR35 legislation which will affect medium and large private sector organisations and have far-reaching impacts on the way they engage with non-permanent workers.
Of course, it’s great news that they’ve delivered on this pre-election promise. However, the timeframe between the review – from now until mid-February – and April, when the reforms are due to come into effect, is woefully small.
Many of us had hoped for a delay to the changes until 2021, but this now seems off the cards.
With this is mind, I’d like to answer this article’s title: no, you can’t afford to delay your preparations for IR35 changes. To do so, would be to risk being caught out.
But what could these changes mean for your business?
The reforms to IR35 legislation shift the responsibility of determining the tax status of personal services company (PSC) workers to the engager. If the PSC’s assignment falls outside of IR35 legislation, they are deemed to be self-employed, so gross payment will be made to the PSC. Conversely, if the assignment falls inside of IR35, the professional should be treated as an employee, applying PAYE and NIC deductions from their payment.
One need only look at the public sector, where these reforms were hastily enforced in 2017. Many public sector organisations:
Yes, the private sector has had more time to prepare for the reforms. However, in a recent survey we ran, 68% of private sector respondents said they expect to see potential cost increases when IR35 reforms come into effect, 56% anticipate a loss of key talent, and 46% think they will experience greater difficulty engaging with non-permanent workers. This last point should be of particular concern considering how skills-short the current talent market is.
Here's what you need to do
Visit our website for further information about outsourcing your engagement with contractors, or for further information about our IR35 solution, email IR35@hays.com.
With over 20 years experience within the industry, Geoff’s previous roles providing integrated recruitment solutions to the financial markets has lead him to partner with a range of corporate clients. His position is pivotal to ensure Hays deploys the right recruitment solutions for businesses within UK & Ireland; RPO, MSP, SOW. He manages the internal sales strategy in addition to leading the Hays Consultancy Service (SOW solutions).
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