From April 2020, medium and large businesses in the private sector will become responsible for determining the IR35 status of contractors, with the fee-paying party (often the recruitment agency or end-client) set to carry the liability. Similar rules were introduced in the public sector in 2017.
The study by IR35 tax specialists, Qdos, showed:
- 48 per cent see independent contract assessments as the key to setting IR35 status accurately
- 24 per cent believe sharing the reasons behind a decision along the supply chain will ensure accuracy. This is something the Government proposed in the recent IR35 consultation
- 22 per cent think that holding engagers responsible for inaccurate decisions is most important. Currently, end-clients will become liable when ‘reasonable care’ has not been taken in setting IR35 status
- six per cent see ‘other’ methods as the critical factor, which centre on the need for these parties to be better educated on IR35. HMRC has regularly promised to increase the level of guidance and support it offers the private sector.
Seb Maley from Qdos said: “Above all else, these findings emphasise how concerned contractors are about IR35 reform in the private sector. After many contractors were wrongly placed inside IR35 as a result of public sector reform, independent workers simply do not trust private sector clients and recruiters to make accurate status decisions without assistance.
“The fact that nearly half of contractors have called on their clients to seek external and objective advice when assessing IR35 is also another indication of the little faith these workers have in HMRC’s IR35 tool, CEST.“
Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2019