After numerous delays, the IR35 private sector reforms appear all but certain to come into force in April 2021. As such, getting ready for these changes will have to be a priority, not just for freelancers, but for the recruitment agencies they work with.
This is no easy task, given the multitude of challenges already posed by the COVID-19 pandemic, but it is a necessary one. While many recruiters may already have done the bulk of their preparations ahead of the legislation’s originally scheduled start date of April 2020, here are some top tips for those that haven’t.
Getting your IR35 preparations underway early will help to ensure that all your measures are in place and any issues dealt with ahead of the rules coming into force.
Remember, these rules have been pending for several years now, so inadequate time to prepare is unlikely to be accepted as an excuse for not complying with the legislation.
Understand the rules
The new legislation represents a complete break with previous rules, under which contractors determined their own IR35 status. Therefore, it is vital for agencies to understand the background to the new rules and why they are being implemented.
A thorough understanding of the new rules and the rationale behind them will ensure that recruiters are prepared to answer any questions that contractors or clients may ask.
Learn from the past
An important thing to remember when private sector IR35 rules come into force is that public sector reforms took place in 2017. This provides an excellent opportunity for recruitment agencies to observe what occurred then and learn from mistakes that were made.
This will help recruiters in building their understanding of the legislation ahead of time and incorporating this into their existing operations.
When the public sector reforms came in, many companies were unprepared and found it difficult to accurately determine contractors’ correct status. This resulted in blanket assessment and tribunals, along with severe criticism of how the government implemented the rules.
As a result of this criticism, changes have been made in order to resolve issues. But it will still be valuable for recruiters to study and learn from mistakes made in the past.
Review the guidance
Following the criticism that greeted the public sector reforms, the government has endeavoured to provide guidance for companies to review when they are making changes to their procedures in preparation for IR35. Guidance can be found here.
Seek expert advice
While the government has pledged to provide guidance, recruiters will doubtless have uncertainties regarding aspects of the new legislation. For that reason, it is recommended to seek advice from experts.
IR35 experts can help recruitment agencies to have the right tools ready to prepare for the reforms and to correctly implement changes when the new legislation comes in and ensure they are fully compliant.
Author: Steven English