IR35: the major legislation change your business needs to be prepared for in 2020

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by Rebekah Valero-Lee on

It's the start of the new year and the one thing that should be the priority for every private sector organisation who engages contractors, is IR35

In just 4 months (92 days), IR35 will come into effect in the private sector, directly impacting all companies who engage contract workers. These changes will affect a large part of the private sector as the new legislation requires companies, not contractors or agencies, to define the IR35 status of their contractors.

Businesses must assess each role individually or risk being in breach of ‘reasonable care’ imposed by the new rules. The potential financial penalties can be significant if incorrect steps are implemented.

Phil Beardwood, compliance & assurance director at Morson, said:

“Some businesses believe that it’s the responsibility of the labour provider to determine the status of their contractor workforce, yet it’s down to the end client to conduct these reviews and ultimately make this decision, which may provide the answer as to why some contractors aren’t yet aware of the forthcoming changes.

“Conservative promises in the General Election have led to some organisations believing that the forthcoming IR35 legislation reform will be delayed or even cancelled.

“This is certainly not the case and at the moment the new tax regime governing contractors remains top of the agenda in the private sector. The countdown to comply is on, with those companies who choose to bury their head in the sand posing major risk to their operations.”

“We strongly recommend that end clients do not simply adopt a blanket approach as a quick fix to reducing their tax risk. Lessons learned from the public sector rollout means that those who do try to cut corners risk losing contractors to a competitor who may correctly deem the same individuals to be outside of IR35. Pay rates could also increase considerably from those deemed as unnecessarily inside and transferred under PAYE, as end clients try to retain these in demand skillsets."

This is where we can help. Morson, alongside our IR35 expert partners, are on hand to support companies who use contract resource to introduce robust process to ensure compliance or risk financial, legal and reputational damage. Contact us at to find out how Morson can help your business navigate IR35.

What is IR35?

IR35 was introduced with the intention of ensuring that individuals operating via a personal service company (PSC), were paying the correct levels of income tax and national insurance, relative to their employment status.

The basis of the legislation is to assess the nature of the direct relationship between the end client and worker (effectively removing any intermediaries).

Where an assignment is deemed ‘inside’ IR35, PAYE deductions have to be made from the contractor’s pay. Any assignment ‘outside’ IR35 is classed as a genuine contractor and is not subject to the same taxation as employees.

Morson, alongside our specialist IR35 partners, Weightmans LLP and Champion Contractors, are experts in this legislation and are on hand to offer practical advice, tools and guidance to ensure you are prepared and compliant by April 2020.

You have only 4 months to become compliant

With only 4 months to go you should have started your preparations in 2019 and should now be well on the way to ensuring compliance. We’ve prepared a countdown calendar, so you can see what you should be considering and when to prepare for the upcoming changes to IR35 legislation.

  • 6th April 2020IR35 reforms go live
  • FEB - APR 2020
    • Assess new roles for IR35 and undertake training for internal staff on updated processes.
  • OCT 2019 – FEB 2020
    • Apply an employment status test to all PSC contractors that is relevant and fit for purpose.
    • Communicate and liaise with contractors to ensure they are aware of the new rules.
  • July – Sept 2019
    • Agree IR35 testing solution and conduct a high level assessment.
    • Establish how each contractor is being paid.
    • Review how the contractual workforce is supplied.
  • April – August 2019 
    • Organisations should start a full review of their contractual workforce and the work performed/required.

If you’ve missed a stage or are behind in your preparations, we can offer advice and solutions to help mitigate risk at all stages up until and beyond April 2020. Contact for more information.

Don’t prepare and face putting your business at risk

Failure to comply with the IR35 reforms could leave your business open to extra expense and exposed to risk. Contact to find out how we can help you mitigate financial risk and reputational damage.

  • Financial risk

If HMRC finds contractors to have incorrect determinations then the end client will face potential tax / National Insurance losses.

For example: For a contractor on £100k the tax / National Insurance would be circa £20k. Therefore, for a contractor on a salary of £100k who is found to have been incorrectly determined, the end client would face a bill of £80k plus interest and penalties/fines over 4 years.

Potential end client bill per contractor = 20% (of total salary) + interest + fines x 4

End clients could be left open to financial risk if their contractors are found to be incorrectly determined. As you, the end client, will be responsible for determining whether a contractor is ‘inside’ or ‘outside’ scope you must ensure you are making correct assessments.

Find out how Morson can help with the assessment process contact

  • Legal, reputational and operational risk

Outside of financial risk, operational, legal and reputational damage can arise if businesses do not prepare for change appropriately or early enough. Delay to projects due to loss of resource, litigation with HMRC and a restriction to the flow of contract talent are all risks that may arise if you do not prepare early or well enough.

Work with Morson

Collectively and individually our team has a wealth of experience in dealing with IR35 matters across the public and private sector. 

  • Our specialist team

To support you in the lead up to (and following) the April 2020 off-payroll changes, Morson has exclusive partnerships with specialist contractor services company, Champion Contractors, and Top 40 UK law firm, Weightmans LLP, both of whom have significant experience in helping businesses navigate the changes to how IR35 is applied in the public and private sector. 

  • 50 years of experience

Morson have been in the contract recruitment market for over 50 years. During that time we have seen and dealt with many challenges faced by the industry. Therefore we have a unique insight into the workforce challenges faced by our clients and can shape the most effective IR35 strategies.

  • Robust processes

Our 5 step process, including initial audit and individual assessment, is designed specifically to help end client organisations make IR35 determinations. Implemented with our partners, the process drills down on key IR35 factors.  If correctly implemented, this process will provide accurate determinations and allow you to compliantly support and retain your contractor workforce before and after April 2020.

  • Workforce insights

WIth a network of over 1 million contractors we are able to gain unique insights about contractor behaviour and industry trends. Our surveys provide deep market insight, invaluable to clients needing to understand the market when making determinations. Download our latest IR35 contractor report at

  • Public sector experience

Both Morson and our partners have extensive experience in supporting organisations in the public sector through IR35 changes brought in, in 2017.  This has given us an excellent understanding of how to manage the changes effectively which we can now apply to assist private sector organisations

Together we can help you undertake a full review of your contractual workforce, to ensure your business is prepared well in advance of the changes.

Get in touch for support and more information.

IR35 guide

Cx Jobs

Stores Operative

Summary of Role:The post-holder will be a competent Stores Operative who is able to manage their own workload and work to deadlines to help achieve the overall objectives of the operations teamThe post-holder must have the ability to work within a team as well as individually. It is essential that the post-holder has a flexible attitude so that they can become a versatile, multi-skilled individual who has the ability to work across different areas of the Despatch departmentPrincipal responsibilitiesBooking transport for the movement of stock/materialsWrapping/packing of stock/materialsControl of stock rotation / material shelf lifeResponsible for stocktakingResponsible, as part of the Despatch team, for the daily management of stockEfficient measuring / monitoring of stock movements at all timesResponsible, as part of the Despatch team, for the control of inventoryWorking effectively to plan and distribute daily workloadCompleting necessary reporting as required/when requestedProactive thinking with regards to waste reduction, and how costs can be minimisedResponsible for the despatching of finished goodsWithin the Despatch team assist in the Managing the Material Control, GI & Tool storesDemonstrating commitment to Lean principles and Continuous Improvement at all timesCompleting relevant KPI reportingAbility to monitor min/max stocking, JIT, consignment stocking and direct line feedThe Post holder is expected to work flexibly within the role. It is expected for the post holder to carry out activities for which they are competent. Additionally, the post holder will also carry out additional duties upon request from Team Leaders, Senior Cell Leaders and/or Senior ManagementQualifications/ExperiencePrevious store experience, ideally in a manufacturing environmentKnowledge and understanding of stores/stock control systemsComputer literate (primarily Microsoft Office applications)Any previous experience of cost control would be highly beneficialUnderstanding and/or knowledge of Epicor system would be highly beneficialEffective communicator at all levelsWell organized, with excellent attention to detailAbility to work on own initiative

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Currently recruiting for a Steering Systems Design Engineer for a well known automotive client.The role will involve: Ensuring all milestones and KPIs are metSupplier testing/reports I submitted and managed appropriatelyEnsuring that costs (piece price, vendor tooling) are managed reported into the business correctlyAll quality concerns are addressed and managed appropriately within/throughout the business, identifying records and countermeasuresCommodity/Project management (management of suppliers)Support the plant with any concerns raised and trial buildDesign release/design reviews/ BOM managementResponsibilitiesBe the EPS technical lead on some European projectsLife-cycle/service and the developmentTravel requirementsCandidate will be required to travel periodically within Europe and occasionally abroad; For supplier visit and design meetingsTraining to othersCandidates will be expected to share knowledge within the team and sometimes train/ mentor othersGood experience in the specific commodity (steering)Specific experience on our steering (Electric)Be able to operate CANalyzer software or similarMust have good knowledge of control theoryGood FTA experience / Root cause analysisComputer literate, the ability to use Microsoft office to a high level.

Senior Project Manager (healthcare)

Senior PM, Contract (Inside IR35) , OxfordWe are currently recruiting for a Senior Project Manager to work on our Clients Science, Healthcare and Infrastructure projects that range from £20m to in excess of £250m.Job Responsibilities:You will need to be from a consultancy or healthcare client organisation with the ability to undertake a lead role on small projects or work with an Associate or Director, leading on a significant component of a large project. The role would cover the whole project lifecycle from initial inception and business case development, through the design, procurement process, site delivery, commissioning phase and defects management.Key Experience:Understanding of building technologySite experienceAbility to ask questions of designers to understand how solutions will be built.Understanding of the roles of different parties and how these roles change over the life of the project.Working knowledge of the differences between different forms of procurement.Working knowledge of HSE issues and legal obligations of parties and able to facilitate discussions on these topics. Minimum RequirementsKnowledge and experience of the Healthcare, Science or Infrastructure sector (including current issues and business drivers) and local construction market.Knowledge and experience of the NHS Business Case Approval ProcessDemonstrable experience initiating a project inclusive of defining effective project processesExperienced in a Client management role - Able to manage the account in terms of projects that are 'live', plus seeking new opportunities.Ability to present to a large groupChairing and taking accurate notes of meetingsChange Management processExcellent communication and organisational skillsHighly motivated and with excellent industry networkJCT Contract AdministrationNEC 3/4 Contract Administration (Accreditation a positive)Lead Risk Management experience (Workshop, compile and maintain accurate risk registers)Robust Stakeholder Management processStrong Project Management process Preferred QualificationsProfessional Qualification - ideally Project Management/ Construction/Engineering/Quantity Surveying Master's DegreeChartered Status with the RICS, CIOB, RIBA, ICE or other equivalent institutionAPM affiliation preferred (as secondary accreditation)Prince 2 or MSP experience is desirable but not essential

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