April 2020. The moment that limited company contractors (and the companies that hire them) have been fearing for a while now, is coming firmly into view.
Last autumn’s announcement that there will be a change in the way IR35 regulations are enforced in the private sector, with tax liability shifting from the contractor to the fee payer, could potentially reduce the number of jobs available in the market that are considered ‘outside IR35’.
Whilst many legal contractors have been comfortable to operate in an IR35 grey area for a number of years, it is unlikely that organisations will tolerate the same level of risk when the responsibility for compliance crosses to the other side of the fence next year. Any hopes of a last minute government U-turn or further delay have all but evaporated. The message is clear – this is happening, and we all need to be prepared.
Working in an intermediary role, it has been interesting to monitor knowledge levels and opinions on this topic from both contractors and clients across the in-house legal sector. Some organisations are in the latter stages of preparation and ensuring that the changes will have minimal impact on their staffing operations come next April. Others are aware they need to act, but they are still in the early phase of seeking advice and planning. And worryingly, some have little or no knowledge of the upcoming legislative changes.
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