With less than 16 weeks to go until the implementation date of IR35 reforms, also known as the Off-Payroll rules, into the private sector, new research from a recruitment trade body has shown that recruiters believe that just fifty-one per cent of their clients are “actively preparing” for the new IR35 rules.
APSCo said the survey
“suggests that many are not doing enough to ensure they are ready for the changes”.
The Off-Payroll IR35 rules represent a significant new obligation for end-clients, as they will become responsible for assessing their contractors’ IR35 statuses – a complex and involved legal process for HR departments that may well be unfamiliar territory.
Recruitment body the Association of Professional Staffing Companies (APSCo) polled its members, who number more than 700, and although seventy-nine per cent of respondents believed that most of the businesses that they work with are aware of the forthcoming change in IR35 regulations, only fifty-one per cent could say that the majority of their clients are actively preparing for the new IR35 rules.
This is an improvement on an earlier survey in July of this year, when only twelve per cent of respondents said their clients were putting plans in place to respond to the new IR35 rules.
Contractors may be alarmed, however, to find that with just over three months to go, twenty-one per cent of respondents didn’t think that their clients were even aware of the impending IR35 legislation.
Thirty-eight per cent of respondents to the latest survey said their clients are expecting to pay more for contractors after the Off-Payroll IR35 rules take effect, an increase from only ten per cent in July. Seventy per cent of recruiters said that they were not expecting their contractors to agree to working on an “inside IR35” basis by default – a policy starting to be adopted by many large organisations. APSCo said this suggested “a disconnect between the contractor and employer communities”.
On the findings, Tania Bowers, General Counsel at APSCo, commented:
“The countdown to the off-payroll working reform is now well and truly underway – but our latest data suggests that many employers are either unaware of the wider potential consequences of the changes, or simply burying their heads in the sand.
“Irrespective of any review into the roll-out, which may be announced in the Queens Speech, clients should not be complacent given scale of this challenge. Businesses now have a few short months to get ready for incoming changes to IR35 legislation but it seems that many may be ill-prepared. Companies which haven’t already must urgently review their existing contingent workforces to determine what employment models individuals are working through to understand the extent of [limited company] contractor usage. They should then work with trusted recruitment partners to discuss which roles are likely to be in scope across different levels, and if individuals with these skills are thin on the ground or easily replaced, so that plans can be put in place to enable them to sustain and grow future workforces effectively. If we’ve learnt anything from the public sector roll out, it is that we are now entering a period of significant change. However, by working with expert recruitment partners, businesses can ensure that they navigate the new landscape easily.”
19th December 2019.
