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The IR35 Knowledge Series | Part 4 - What are the Effects of Taking a Cautious Approach?

Rebekah Valero-Lee nuclear

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    THE IR35 KNOWLEGE SERIES | PART 4 | WHAT ARE THE EFFECTS OF TAKING A CAUTIOUS APPROACH?

The consequences of adopting an approach that assumes an arrangement falls within IR35 will increase costs. The cautious approach used by the public sector meant that:

  • Contractors quickly left roles to pursue work with other clients
  • Pay rates were increased to retain contractor services

Therefore, you must consider carefully how you treat contractors who are deemed to fall within IR35 and be aware what your competitors doing to avoid losing your contractors to the competition.

In our latest contractor survey and consequent report (download here) contractors were clearly concerned that changes to IR35 legislation in the private sector signals major disruption to the market over the next 12 months. Data from the survey showed that contractors main concerns surrounded if they will end up at a financial disadvantage post April 2020 and that end clients will follow the public sector and go for a 'blanket' approach, deeming all contractors to be inside IR35.

Under the legislation clients must demonstrate “reasonable care” in making their determination which we hope will drive compliance. Morson will work in collaboration with clients and contractors to ensure that reasonable care is demonstrated by the client when making assessments relating to the IR35 status of all individuals. If an individual is determined to be inside IR35 then they will be offered the option to be paid PAYE by Morson (or PAYE through their PSC) or via a Morson PSL Umbrella Limited Co.

Communication is key. As of April 2020, you, the end client must make sure that you inform the worker of the IR35 determination of their assignment.
The contractor will be entitled to ask the client for information on IR35 status and challenge IR35 decisions, HMRC expects end clients to put in place a
mechanism to allow a contractor to challenge a decision.

Download the full contractor report

 

 

Download the full guide to get parts 1-3 of the IR35 Knowledge Series and insights from Morson in-house compliance expert, Phil Beardwood, and our partners Champion Contractors and Weightmans LLP who specialise in dealing with agency/IR35 matters and are fully up-to-date with the intended changes in the Private Sector.

As the 2020 deadline approaches this guide has been created to help you navigate the changes that may impact your business. Recordings and commentary from our latest IR35 forum give insight into:

  • How to avoid costly legal challenges
  • Ensuring your contracts are compliant
  • Reducing the numbers of contractors that leave your organisation
  • Liaising with your contractor population to provide a consistent message.
  • Getting equipped with the right tools and partners to compliantly support your organisation and contractor workforce

The e-book concludes with questions put to the panel by end clients who operate in the private sector. Their questions, and the answers provided, give real insight into the queries and concerns of business professionals who will be directly affected by IR35.

In our role as a specialist recruitment provider, Morson has the appropriate expertise to assist you to ensure your business is compliant with any changes to IR35 and can support you with your full review of the contractual workforce.

Download your copy or contact IR35@morson.com for more information.