Government announce IR35 'review' - but what does it mean?

A review has been launched into the implementation of IR35 legislation in April 2020 - but what do the changes mean and how can businesses ensure they are efficiently prepared?

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Reed Talent Solutions is pleased that the government has followed through on their pre-election commitment to conduct a review of IR35. This new review targets the implementation of off-payroll working rules into the private sector in April 2020 for a smooth transition.

Chancellor of the Exchequer Sajid Javid says that the government is on the side of self-employed people - the review looks to protect those self-employed individuals who fall outside the rules’ scope.

However, given the short timeline between now and April, we would question how effective this review could be. HMRC says it will implement the changes in April ‘come what may’ – despite what they find.

There is a concern among contractors that the new changes don’t go far enough – it was revealed that the review will be about the implementation of the reforms rather than the reforms themselves.

A pressing concern for us, with the Chancellor’s budget announced for 11 March 2020, is when we will get the final legislation which is key to preparations? There is still no clarity around how contract workers can prepare for these changes, other than deciding if they are required to adhere to the new rules. Certain criteria have been released - small businesses are exempt, but any business with a yearly revenue of £10.2m or more must comply.

IR35 will shift responsibility for determining the tax status of a contractor from the worker themselves to the organisation using their services. The off-payroll legislation is intended to ensure that individuals who work like employees pay broadly the same employment taxes as employees.

Reed Talent Solutions can provide businesses with a broad and clear understanding of IR35 and how to mitigate risk and plan for the reforms. Preparing for IR35 is so important, find out why in my overview of the changes.

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Richard Smith 2
Richard Smith
Director, Reed Enterprise Project Management Office

I have over twenty years of recruitment experience up to and including Managing Director level. My current role is Director, Enterprise Project Management Office (EPMO). The EPMO provides strategic project governance across our initiatives for managing business change and transformation across all key business areas including IT, Operations, Finance, HR and L&D.

Our aim is to represent the "single version of the truth" in terms of the status of all initiatives critical to achieving the company's transformational goals and underlying growth strategy to the board. As well as managing the change portfolio we operate as a 'center of excellence' for project management. I am managing REED's response to IR35.

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Solutions

IR35

IR35 reforms were introduced into private sector organisations in April
2021, which significantly impacted the way organisations engaged contingent
labour.

Presenting legal and non-compliance risks for the private sector, it’s critical that businesses seek guidance from specialists to effectively navigate these changes.

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As a business that delivers change projects and consultancy, the changes in the application of IR35 legislation has a big impact on us and our clients. Whether it is making sure we are managing the legislation effectively, or helping our clients ensure they are handling it effectively, it has an impact on what we do.

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IR35 reforms are set to be introduced into the private sector from April 2020, significantly impacting the way organisations engage contingent labour. It’s critical that businesses seek guidance from specialists to effectively navigate these changes - Richard Smith explains how to get prepared.

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