Darren Fell, CEO and founder at Crunch, explains how businesses can best take advantage of the delay to implementation of the new IR35 regulations
Although it may not have received as much attention in the news in the light of current events, and understandably so, there was some good news for employers and contractors announced back in March. The IR35 legislation which was due to be rolled out into the private sector, and which many feared would result in staff shortages and the decimation of large sections of the contracting market, has been postponed to April 2021.
Employers, contractors and recruiters who were perhaps feeling underprepared, given the government only confirmed this would be going ahead in January, have been granted much-needed breathing space in light of other events in the world.
Unfortunately, it does not look likely that the government will cancel IR35 altogether, but the extra time to prepare can be used to the advantage of recruiters, employers and contractors to ensure we are prepared when the roll out finally happens. Seeing as a lot of us have some extra time on our hands, it gives us space to get ourselves acquainted with the basics.
What is IR35 and how will it affect our businesses, recruiters and contractors? The good news is that recruiters and accountants are in a great position to help reassure employers about the best way to proceed in a post-IR35 world and ensure they choose the method of employment that best suits their business needs.
If you work for an employer who regularly brings contractors on board to help with projects, you need to look very carefully at your processes to ensure that they’re IR35-ready. Not only do you have to be able to understand the ins and outs of the legislation and make a judgement on whether a contract could be inside or IR35 or not, you need to be able to prove you’ve gone through this process. At first glance this all feels very complicated, and a robust in-house process is a must for helping you to navigate the rules.
There are also a number of tools on the market, including one from Crunch, which can help employers and recruiters and also provide a report so you have evidence to present to HMRC if it’s ever required.
All this aside, there were some alarming headlines when the IR35 roll out was officially announced back in January, when HSBC and then Lloyds decided to immediately implement a blanket ban on all contractors in their businesses. This is hugely disappointing and there is a concern that other companies will follow suit. As employers, contractors and recruiters, we simply have to keep putting the message out there that a lot of contractors are genuinely outside of the IR35 rules and companies can benefit greatly from the flexibility that comes with taking someone on as a contractor.
There is a lot of information and help out there to help you and your clients navigate the new legislation. Don’t be afraid to reach out for help from experts, whether that be your own accountant or advice hubs, such as this one from Crunch. With the benefit of added time to prepare, there is no reason why the recruitment and contracting market can’t emerge stronger than ever in 2021.