There is currently a lot of contractor confusion around IR35. Many of the business leaders I am speaking to are unsure on what is staying and what is going!
Whilst she was Prime Minister, Liz Truss announced the Government’s decision to repeal the “IR35” off-payroll working rules, with effect from 6 April 2023. So, to the delight of many businesses, contractors would be responsible again for making their own IR35 status determinations.
However, after facing a huge backlash from the measures announced during the mini-budget, Kwasi Kwarteng was swiftly replaced by Jeremy Hunt as The Chancellor of the Exchequer, who then announced (amongst other things) that IR35 reforms would actually stay!
The IR35 reform repeal would have given businesses a huge amount of freedom around the flexibility of their workforce, which is very much needed in the current trading environment due to the lack of available talent.
With the IR35 reforms staying, I worry that many organisations will still be bogged down in IR35 compliance processes and unable to access the contractor talent they so desperately need. It’s already a challenge to find contractor talent. New research by IPSE (the Association of Independent Professionals and the Self-Employed) shows that over a third of contractors (35%) have left self-employment since the IR35 reforms and due to the effects of the pandemic.
Just as we did when the IR35 reforms were implemented, we continue to support our clients with their queries and needs, overcoming any contractor confusion and helping them to navigate the various compliance requirements to ensure they protect their business but also engage the contractors they need.
I shall of course be monitoring the efforts of those lobbying the Government to reconsider the repeal of IR35 reforms with great interest and have no doubt that rumblings in the market will continue apace. Prior to being appointed as the latest Prime Minister, when Rishi Sunak was chancellor, he actually introduced the 2021 IR35 reform into the private sector, so the repeal is very unlikely to make its way back onto the table during his tenure, but who knows what the future holds when our next Prime Minister takes the stage!