Lately we’ve been seeing a lot of ads and communications on social media, as well as email marketing and targeted online advertising regarding IR35 reform in the private sector. We’re writing today to let you know that we don’t recommend any of it, as unfortunately it’s all a load of rubbish.
(18/03/2020) Please Note: IR35 Private Sector Reform has now been delayed to April 2021 due to the impact of the COVID-19 pandemic.
The harsh truth is, that under current legislation, there is literally nothing you, an insurer, an accountant, and employment lawyer, or your mate Jeff can do to help ‘protect your IR35 status’. Literally nothing…
So these companies out there who are offering ‘protection’ or ‘guarantees’ are just looking to make a quick £ off the hype.
In addition, no amount of contract reviews by a third party, paid for or otherwise, will actually help the situation.
The engaging company has the final say on your inside/outside IR35 status as of April 2020, and even if you appeal it, their word is final. The appeals process is, unfortunately, not worth the paper it’s written on and we’re looking forward to hearing how the government plans to fix this (cue tumbleweed).
So by all means, try to educate the engaging company, try to help them understand IR35, but whatever you do, do not pay for an IR35 guarantee service or similar, it’s wasted money.
As a contractor you probably know a lot more about IR35 than your engaging company, so you are likely the best authority on this situation, but if you are looking for some free pointers regarding opening up a discussion with your engaging company then please feel free to visit our updated IR35 page here.
We’re already seeing reports from clients and recruiters of private sector contractors being blanket labelled ‘inside IR35’ and we’re expecting a mass exodus of talent from the PSC sector. So if you’re currently facing an ‘inside IR35’ decision with your engaging company then it’s time to make a few changes. Your options can include:
- Trying to educate the engaging company and defend your IR35 status
- Requesting an increased daily rate to mitigate the costs involved in continuing your contract
- Looking for contract work elsewhere – especially with a small company where the decision will remain with the contractor
- Looking for permanent work
Some companies have decided to come out and declare their contract workers, rightfully so, are outside IR35 – these forward looking companies have ensured they will be able to access the top contractor talent as a result. Our advice to engaging companies is and always will be: judge every contractor on their precise working conditions and make a fair determination or risk losing your temporary highly skilled workers.
We understand this is a particularly stressful time for contractors, and we’ll be here to help advise our clients (for free might we add!) on the situation as it unfolds and evolves as best we can. We’re actually predicting a bit of a collapse and crisis in the temporary highly skilled market, with vital sectors such as healthcare and defence particularly at risk. As a result we wouldn’t be surprised if IR35 reform is overturned in the not too distant future – or at least amended. After all, the Government will be collecting less in taxes if some contractors quit, so what incentive do they have to keep this rigid reform in place?
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