The trouble with taxation change is that many businesses and consumers see them as negative. This has certainly been the case when referencing pending reform of the IR35 legislation. The Government’s decision to extend the policy to April 2021 has caused a great deal of unease for contractors and the organisations that employ them.
The media is full of speculation that the introduction of IR35 in the private sector is a negative move – this outlook has understandably filtered down to the minds of contractors and recruiters. But those who still had a lingering hope that the Government would change its mind seem set to be disappointed; IR35 reform in the private sector looks all but certain to take effect in April 2021.
Of course, there will be extra work for some. End-user clients who need to determine whether IR35 applies to their assignments will need to ensure that their processes and conclusions are watertight for any off-payroll workers engaged.
The new responsibility of determining ‘inside/outside’ status forces companies to do one very important thing, review how their company engages contingent workers. This forced adaptation should be seen it as a good thing, better understanding leads to a more thorough knowledge of operating procedures, and after all – knowledge is power.
We believe the new legislation provides an opportunity to audit your resources and ensure you have the right processes in place to support your business. All while becoming IR35 compliant. If handled correctly IR35 could be very beneficial to your business – both from an operational and fiscal perspective.
While so much of the commentary around IR35 seems to be a portrayal of doom and gloom, we see IR35 as an opportunity for you and your businesses to develop and evolve. Changes will generate excellent opportunities for those that have started to plan and take action for IR35, but it is important that you act early.
Now is the time to reshape your operating model so that your business has adequate resources in place to be fit for the future landscape. By reviewing your strategy, you will be able to identify many areas within your business that can be improved relatively easily.
It’s obvious that the private sector can’t simply flick a switch and expect everything to be done and dusted by April 2021. It will be a process of evolution, one that mirrors the constant fluidity of business. But if your firm hasn’t started or is yet to finalise its plans, now is the time to consider whether you’re taking the best approach.
Contrary to what you might have been told, we believe IR35 really can usher in the best of times, not the worst of times.
To find out how we may be able to compliment your ongoing, preparatory efforts please do not hesitate to contact us directly: firstname.lastname@example.org.