IR35 - a Q&A with Owen Goodhead

How has your team been preparing for the impact of IR35?

We learned a lot from the changes to IR35 in the public sector in April 2017. Due to the nature of our business, and our commitment to keeping our clients and candidates informed on factors which may impact their terms of business, we have been preparing for the introduction of this into the private sector since then - keeping our finger on the pulse of all things IR35.

Once the most recent proposed changes to the legislation was confirmed by the Chancellor, our plans started with a big communication drive. 

Due to the unfamiliar processes created by the amendments to IR35, many businesses remain unaware of how their responsibilities have altered and a number of businesses may still have unidentified contractors within their workforce. This could cover a range of workers who may fall into scope, including consultants, trainers, or contractors occasionally used by the IT department. It isn’t just the obvious workers, and businesses need to ensure that they work closely with their HR departments and legal teams to ensure all bases are covered. 

Alongside this, we have focused on communicating with our personal service companies (PSC). By keeping them updated on how these amendments will impact them, we can ensure that our workers are taking independent advice and are able to make well-informed decisions.

How are you managing the risks presented by the legislation?

Most legal and compliance risks can be managed by having robust processes in place, and most large recruiters will be well-versed in dealing with the regular changes to tax and employment law in the UK. There are other risks, however, which are harder to quantify and deemed more commercial than legal. 

What will this change mean for the contractor workforce - will it drive them to permanent employment? Will clients be prepared to pay more to retain key contractors? Will it worsen skills shortages? These are the questions that the industry is seeking reassurance around.

Are there opportunities to be found in the legislation?

Based on our experience of the legislation rollout across the public sector, we are anticipating that some clients will prefer to hire staff on a permanent basis.

Contractors may see the additional benefits permanent employment can offer and use this as an opportunity to change their preferred ways of working, or alternatively, clients may look to  assign project work on a ‘statement of work’ basis.

What role does effective communication play in the successful introduction of IR35?

Understanding IR35 can be quite the task; there is an infinite amount of information available, and businesses and tax experts are keen to offer their opinion. This creates mixed and conflicting messages which ultimately make this task more complex for someone trying to understand how their earnings will be impacted by the legislative change. 

We’ve tried our best to cut through the noise and stick to a clear narrative - the last thing we want to do is to cause further confusion. We’ve also set up a dedicated phone line, email help desk and live chat teams to ensure additional support is there in the lead up to the change in legislation.