According to a new study from Grant Thornton, 38 per cent of the UK’s mid-sized businesses say they are not yet prepared for the new IR35 rules which come into force on April 6th.
The survey was conducted among senior decision makers at 605 mid-sized firms (companies with annual revenue between £50 million and £500m) from January 28-February 4 this year.
25 per cent of the 605 companies polled said that, while their preparations were underway, they were not yet fully ready. Meanwhile, a further 13 per cent had either made minimal preparations or had only just begun to prepare.
Grant Thornton Associate Director of People Advisory Bethan Gill said: “The new IR35 rules can be difficult to navigate and are likely to result in significant additional compliance burdens and employment tax considerations for many organisations. While the deadline is getting ever closer, there is still time.”
“Businesses should be taking action now to ensure that they have considered their position and properly assessed the impact of the new rules and how it can be effectively and compliantly managed.”
Meanwhile, a report conducted by HMRC and IFF Research has suggested that the new reforms may have a minimal impact on the UK’s employment agencies.
The research, conducted from November 2020 to January 2021, claimed that the employment agencies interviewed had seen little impact from the forthcoming rules, with few said to be reporting early signs of reduced client demand or decreases in contractor numbers.
However, this report has quickly been criticised due to its small sample size, with just 34 employment agencies polled, and for the fact that it was commissioned by HMRC, the agency responsible for the IR35 reforms.
Author: Steven English