Home IR35 HMRC study reveals more than half of educational institutions unprepared for IR35

HMRC study reveals more than half of educational institutions unprepared for IR35

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According to a study commissioned by HMRC, more than half of the UK’s educational institutions that engage self-employed workers are not prepared for the upcoming IR35 changes, which come into effect on April 6th.

The report found that 53 per cent of educational institutions said that they were not prepared for the implementation of the new rules, with 25 per cent saying that they were “not at all” prepared. Of the 47 per cent that felt prepared for the rules, only 18 per cent said that their institution felt “very prepared”.

Furthermore, with regards to awareness and knowledge of the upcoming reforms, 39 per cent of educational institutions surveyed said that they had not heard of the IR35 changes. 33 per cent said that they had heard of the reforms but had no knowledge of what they meant.

22 per cent of institutions had heard of the reforms and claimed to have some knowledge of the upcoming changes, leaving just 6 per cent of those surveyed that felt they had a good knowledge of the IR35 reforms.

Following the survey, qualitative follow-up interviews were conducted with participants regarding their awareness and preparedness for IR35 reforms. HMRC stated that “Some sites felt confident that they were already complying with the upcoming reform, or would need to make minimal changes, as they were supplying status determinations to the contractor as standard.”

The report went on to say: “Some schools that lacked awareness mentioned relying on the local authority to provide them with information about the upcoming reform and had yet to receive any information about the 2021 reform.”

It should be noted that the survey and follow-up interviews were both conducted from September to November 2020, around the same time that HMRC began increasing its education programme to help educational institutions prepare for the 2021 IR35 reforms.