The delay in the implementation of the IR35 reforms will give companies the opportunity to hold on to critical members of their workforce and quickly employ new staff to fill gaps at what is a very uncertain time.
Contract staff can be mobilised quickly and relatively easily, something which is an attractive proposition for businesses in the current environment. The postponement of the IR35 reforms, which were originally due to come in on April 6, were announced by the UK government this week as part of a £330bn package of measures aimed at helping businesses survive the economic uncertainty. The delay – until April 6 2021, will allow firms that aren’t willing to take on permanent staff to continue to issue temporary contracts to fulfil specific needs without the worry of being liable for incorrect determinations.
Simon Nicholls, Practice Manager for the contract recruitment market at Franklin Fitch, welcomed the postponement, saying: “Delaying the reforms is perfect timing as it will help bridge the gap in the market in the coming months.” He said that demand was so high in some areas of the market that companies are offering contracts with immediate starts after just one video interview.
“In times like this, flexibility in the hiring process is key,” said Simon.
It is important to note that this is just a postponement however and that the changes are still due to come into force next year. At Franklin Fitch we have been preparing for this year’s planned deadline and have done a lot of work to ensure most of the contract roles we work on have been assessed ahead of time using Qdos. (Just to recap, one of the main changes to the IR35 legislation, which is aimed at removing the tax advantages of providing services via a limited company for individuals who are not truly working for themselves, is that the responsibility for determining the IR35 status of the contractor will fall to the company rather than the individual themselves.) Until the new deadline however, it remains the responsibility of the contractors – as it has done for the past 20 years - to make sure their contracts are outside of IR35.
No time for complacency
Still, this is no time for complacency on either side. Businesses need to start preparing now. Anyone seeking advice on how to approach the reforms successfully, should contact our contract team on email@example.com.
We’ve already successfully helped a lot of our clients and can do the same for you ahead of the 2021 implementation deadline. The time to act is now. Not later.
by Claire Shoesmith
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