One month to IR35: Why you shouldn’t take a blanket approach

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by Rebekah Valero-Lee on

With mere weeks to go until the new IR35 rules come into play for the private sector, companies are ramping up their efforts to consult with their contractors.

This seismic shift in tax legislation will affect the ways in which companies attract and retain talent, as well as making changes to supply chain relationships and business operations. The number of businesses using agency and contract workers has increased 40 per cent in the last 10 years[1], and for those who rely on them to deliver the majority of their labour, it might be tempting to implement a blanket, one-size-fits-all approach to quickly and efficiently side-track the complexities that IR35 presents.

However, legislation dictates that any private sector business using contractors must take ‘reasonable care’ throughout this process, and those found not doing so are at risk of major repercussions – from both HMRC and their contractor workforce.


What the workforce are saying

IR35 is putting a lot of power in contractors’ hands. Recent surveys have highlighted that, moving forwards, half of all contractors (50%) will only take contracts that are outside IR35[2], while our own research has indicated that 40 per cent of contractors who find themselves inside of IR35 will work to negotiate an increase in pay to balance the impact on their income brought about by moving to PAYE.

During the 2017 public sector roll out, those who adopted blanket assessments – deeming entire contractor populations as inside IR35 – lost a proportion of their contractor workforce to competitors. Any blanket approach in the private sector could have the same effect, either in the short term, long term, or both. After all, once IR35 comes into play, contractors need only compare two potential clients and what they will do to ensure they can work outside of IR35, before choosing the best option as their next role.

A shake up in how contractors are engaged, without due care and attention to each contractors’ circumstances, current and previous working conditions and levels of responsibility, will make them feel undervalued. As such, they’re more likely to seek alternative roles, causing serious repercussions for the UK labour market and businesses already tackling labour skills shortages.


What HMRC is saying

Currently, contractors engaged via a PSC (personal service company) and operating in the private sector can determine their own IR35 status. From April 2020, this responsibility shifts to the end client. Even businesses that use intermediaries and fee payers, such as Morson International, are accountable for conducting these reviews and must ultimately make the decisions as to whether individuals fall inside or outside of IR35.

HMRC has issued a warning that businesses must demonstrate ‘reasonable care’ throughout the implementation of IR35, insisting that every private sector company produces a status determination summary (SDS) that outlines the case-by-case reasons to deem that individual as inside or outside. For companies with extensive contractual chains, there is a responsibility for SDS’ to be passed to every supplier.

Any client found not to have adopted reasonable care risks the IR35 determination becoming worthless, meaning those found to be ‘blanketing’ could be increasing their chances of a penalty from HMRC.

It is also worth noting that those who do move contractors to PAYE will have to consider the regulatory changes that brings; for example, the Agency Workers Regulations outlines processes on worker equality, pay, hours and holidays.

Final legislation and guidelines on IR35 will be introduced mid-March – eye wateringly close to the IR35 implementation date in April, meaning businesses have very little time to prepare. As such, many are calling for a further review of IR35. But one thing is certain – it is coming and is set to cause a shakeup.

Whether you are a contractor or end client, Morson are here to support you through the legislative changes, contact us at to contact our expert IR35 team.


Cx Jobs

Dual Skilled Engineer

Recruiting for Dual Skilled Engineers (Rail/Rolling Stock) to work in Manchester on a long-term contract basis for a leading client in the Rail Industry. Within the team you will ensure that traction and rolling stock are serviced and maintained in a safe, efficient and cost-effective manner whilst constantly seeking to improve quality. Role Description Main tasks of the role Corrective maintenance (Electrical or Mechanical, Coach Repairing & Plumbing) Interior Modifications: Wifi, wiring looms etc Preventative maintenance (Electrical or Mechanical, Coach Repairing & Plumbing) Basic maintenance competency e.g.: side skirt cleans, brake pads, block changes etc. Primary fault finding/reporting Secondary fault finding Depot or fleet specific requirements where required Additional tasks - all team members responsible for general depot duties Taking of fuel meter readings off rail vehicles Depot cleaning/general housekeeping (This will have no impact on Cleaners headcount) Driving company vehicles if certified Train cleaning by exception (This will have no impact on Cleaners headcount) Essential Time served apprenticeship or equivalent with associated technical qualification of City and Guilds in Mechanical and Electrical Engineering or equivalent. Skilled in both mechanical and electrical engineering. Basic MS Office IT skills.


Morson International require an experienced Handyman for an office block in Cardiff. Starting immediately, covering a month of leave as a Handyman within a call centre environment. On offer: Immediate start Weekly payments to - LTD, Umbrella or PAYE 4 weeks contracts with the potential to extend Parking on site Duties include, but not limited to: Opening & closing building Fixing door handles Moving furniture Rubbish If you have experience as a Handyman on commercial buildings or schools, please apply online today or call Quade on 07714 541 325.

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Job Title: Senior Technical Rail Officer Job Type: Fixed Term Industry Sector: Transport and Rail Salary: £40,413.00 Per Annum - £50,029.00 Per Annum Benefits: 27 days holiday per annum, Local Government Pension Scheme, Flexible working Location: Leeds Recruiting for a Senior Technical Rail Officer to: Act as the primary specialist in a role providing critical rail service technical support to the Management Team, Board and Partners in relation to analysing, selecting, contracting and implementing the passenger-service solution in its interim and final outputs, and in ensuring it is aligned to other rail enhancement programmes across the North of England. You will be expected to provide impactful strategic and policy input by building strong relationships, internally and externally and be able to influence, shape, challenge and contribute to the development, delivery and input into rail enhancement programmes in the north of England. With good operational and commercial understanding, you will realise the impacts on possession plans and revenue for changes to train plans and will be able to identify, report on and manage risks or issues arising from a train service prospective. As a confident communicator at senior level you will have the ability to influence a wide range of stakeholders, partners and senior colleagues and the confidence to represent the in a range of forums at regional level. Candidates must possess a relevant degree or other post graduate qualification, or the relevant experience gained through experience, in addition to a professional qualifications. Experience * Relevant degree or other specialist post-graduate qualification or the equivalent level reached through experience. * Professional qualification, chartered status or equivalent experience. * Significant experience and detailed knowledge of rolling stock, train planning and timetabling matters relating to service provisions including train length, frequency, capacity, passenger needs and expectations. * Significant experience and detailed knowledge of operational issues such as traincrew training, resourcing and train stabling and depot requirements, sufficient to support business case development for both short term disruption planning and intermediate and end states of a similar programmes * Commercial understanding regarding possession plans and revenue impacts for changes to train plans. * Experience within programmes of identifying, reporting and managing relevant risks or issues developing from a train service perspective. * Significant experience of co-ordinating a range of cross cutting, complex initiatives into a cohesive output. * Significant experience of planning and organising own work and the work of others (internal or external) over the medium term. * A confident communicator at a senior level who is able to influence a wide range of stakeholders, partners and senior colleagues. * Considerable experience of managing complex budgets and undertaking accurate monthly project and programme reporting. * Reputation, ability and confidence to represent in public, professional and stakeholder forums at a regional level. * Requires significant experience of leading the development of business cases and inputting into the development of transport strategies for a defined area. * Acts as the lead professional and will be seen as primary specialist (subject matter expert). * Requires sufficient strategic and technical understanding to act as the primary source of expertise.

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