According to a new survey of over 3,000 contractors from IR35 Shield, entitled IR35 Road Ahead, 52 per cent of contractors currently in work are yet to have their IR35 status assessed by their end-clients, ahead of the new rules coming into force in April.
IR35 Shield said that the research showed “the risks that hirers and agencies run by attempting to circumvent their compliance obligations, including recruitment struggles, rising costs and damage to projects”.
Other crucial findings in the report include that 72 per cent of contractors say they will charge a different rate for “inside IR35” work, while 65 per cent would try to avoid working “inside IR35”.
Just 8 per cent of those polled say they would happily work with an umbrella company and 74 per cent say they cannot determine whether an umbrella company is compliant with the new rules, leaving them vulnerable to tax dodging schemes.
IR35 Shield CEO Dave Chaplin said: “It looks as though half of the market is leaving Off-Payroll compliance until the very last minute, which looks likely to cause some unnecessary complications and a considerable demand for assessments in a very short time window.”
“Firms using CEST to conduct status assessments or who apply blanket rules to negate their compliance obligations are likely to encounter considerable disputes and recruitment struggles. Meanwhile, unfair tax treatment and a lack of transparency when it comes to engagement models by agencies and clients threaten to push contractors unwittingly into tax avoidance schemes.”
The IR35 Shield research follows a recent poll by Qdos Contractor, which found that over half of end-clients are yet to communicate whatsoever with contractors about the upcoming IR35 rules.
Author: Steven English