IR35 Reform - will we see draft legislation this week?
Last week it was confirmed that the draft Finance Bill will be published this Thursday (11th July) and this leads many people to believe that we may also see the much awaited draft legislation for the IR35 reforms which are scheduled to take effect from April 2020.
It is also likely that we may see a response published to the IR35 consultation which closed in May, and which, as yet, hasn’t elicited any comment from the Government or HMRC.
There has been hopeful speculation over the past few weeks that there could be a delay to the implementation of the reforms, as was requested by most of those who responded to the Consultation document. Whilst a petition to repeal the legislation has so far (at the time of writing) garnered over 20,000 signatures, my opinion is that a delay from the April 2020 date seems unlikely at this stage. We mustn’t forget that the Public Sector rollout of this legislation has been deemed successful in increasing the much-needed tax take for the UK Government, and this, coupled with the current imbalance between how roles in the Private and Public Sector operate regarding IR35 makes a change to the intended 2020 roll out seem unlikely.
However, as we all know, the political climate is far from stable at the moment, so it is not outside the realms of reason that plans will change!
Something that has started to happen over the past few weeks are a whole host of reports about specific businesses and how they are approaching IR35 assessments for their contractor populations. Some companies have been reported as requesting that contractors either switch to a permanent contract of employment now, or leave the company. Others have reportedly offered their existing contractors a number of options such as leave their assignments, or accept ‘inside IR35 contracts’ via an umbrella or PAYE payroll service.
Of course, none of these options is very palatable to the populations of specialist contractors working for these businesses. One would expect that the majority of these workers are trying right now to get contracts elsewhere; or at the least are very concerned about their existing assignments! One well-known financial services business has publicly stated that they will continue to utilise contractor resource post 2020 – a clever move as undoubtedly their brand will become a popular choice for freelancers in the light of the general uncertainly from clients.
It is worrying that there are still statistics showing that about 15% of business have ‘no idea at all’ about how they are going to handle the change in the law and less than half have made any progress in terms of planning their compliance projects. As I have mentioned before, it is vital that businesses start to plan now, as April 2020 is not as far away as it may seem!
If we do see draft legislation this week, it will at least become clearer exactly what we are facing, and give all parties sufficient time to prepare.
Contact me for more information on how our Contingent Labour services can help you plan for success when the legislation changes.
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