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IR35 – Where’s the fire?

Author: Dan Haydon
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When IR35 came into the public sector in 2017, many people within vertical markets had a pretty relaxed attitude towards the shift. “What impact?” was a general consensus, “we’ll just switch our supply to the private sector”? The result of this we now know was less than ideal, with significant talent subsequently leaving the public sector en masse.

April 2020 will revolutionise the whole contracting market, there’s no way to get around it. Having spoken to over 100 hiring managers about it and their plans to manage it, what’s clear is the message has not been loud enough from HMRC and the Treasury.

The preparation necessary is vast. Pretty much every single limited company contractor needs to be assessed. And they need to be assessed with one of the most ambiguous, multiple choice assessment tools that HMRC currently use as a “bible” to determine whether that contractor is either inside or outside.

The cynic in me would say, having completed the CEST tool on HMRC’s website from many hypothetical and real-life scenarios, it’s geared towards placing as many people inside IR35 and boosting the tax revenue. Seven times out of ten you just don’t get an answer. You get a garbled message about being unable to determine at this time, and to contact HMRC.

Sitting down with end clients who are at huge risk of wrongly determining their contractors due to a lack of adequate communication from HMRC and subsequently having to pay tens of thousands of pounds for each contractor is a daunting and frankly terrifying situation.

There is light at the end of the tunnel. Yes, there will be arguments between clients and contractors and agents and contractors but ultimately, if the right tool is used to assess the contractor in the right manner, then the right status will be assigned and the recouping of unpaid tax will be a moot point.

Forward Role have access to two alternative tools to HMRC’s in order for clients and contractors to have that deserved peace of mind when either assessing or being assessed and are currently in the process of partnering with four large organisations to transition their contractors into a safe IR35 determined status.

We (and by “we” I mean agents, contractors and hiring managers) need to have a plan and act now, as HMRC are ruthless in their approach and ignorance will never be regarded as an excuse when it comes to dishing out fines. Having attended numerous IR35 discussions, consultations and learning from legal, accountancy and Government experts one thing remains clear: Know what you need to do, and act on it as soon as possible. You don’t want to be one of those organisations trying to sort this out in the middle of February to assess your contractors as there will not be enough time to keep your crucial, niche expertise you’ve spent so long acquiring.

For a fully serviced solution, further information, or just want to talk through the above in more detail, please don’t hesitate to call our contracts team on 0161 9148499.

 

Daniel Haydon is ERP Recruitment Lead at Forward Role, you can find out more about him HERE.

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