After changes to IR35, commonly known as the off-payroll working rules, were introduced in the public sector in 2017, the Government revealed in the 2018 Budget that reform will be implemented in the private sector next year.
Changes will see private sector companies that engage contractors responsible for and liable when setting the IR35 status of these individuals. When involved in the process as the fee payer, recruitment agencies are expected to carry this liability.
A survey from IR35 advisor, Qdos, among 1,400 contractors showed:
- 30 per cent have no confidence in private sector engagers to be ready for IR35 changes
- 47 per cent have little confidence
- 11 per cent are undecided
- 12 per cent believe engagers will be ready.
The data also shows that most contractors (61 per cent) believe direct clients will be better placed to contribute to accurate IR35 decisions compared to recruitment agencies (39 per cent).
The largest set of contractors (36 per cent) also view the opportunity to work outside IR35 as most important when considering a contract.
Qdos CEO, Seb Maley, said: “Thousands of contractors have been wrongly placed inside IR35 by public sector engagers as a direct result of reform in 2017. Understandably, this has led many independent workers to question whether the private sector will be in a position to administer IR35 accurately next year.
“Private sector clients and recruitment agencies would be wise to pay attention to what are justified concerns of contractors. Businesses rely on the flexible of the independent workforce, while the recruitment industry, that now finds itself caught up in IR35 reform, depends on contractor placements for most of its turnover.
“The good news is that these companies do have time to prepare, and reform is manageable. But this time does need to be used wisely, and private sector businesses - whether a direct engager or a recruitment agency - should take the initiative and equip themselves with the skills needed to contribute to well-informed IR35 decisions on what will be a huge scale.”
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Susie Hughes © Shout99 2019