New draft IR35 legislation is released

Yesterday, the Government released the draft legislation in relation to the new IR35 tax regime to be enacted across the private sector from April 2020.

As we expected, there has been no material change from their previous position and little of the concerns raised in the consultation (by the recruitment industry and business generally) appear to have been taken on board, although there is an undertaking to provide further guidance later in Summer as well as to enhance the CEST tool.

A contingent workforce is an invaluable tool for most businesses providing specific expertise and experience when needed which is not available within the employed/permanent arena.

The issue of the draft legislation should act as a call-to-arms for any business with a contingent workforce in place. Whilst there is a raft of information and guidance on our website there are, in my opinion, three actions all businesses need to be taking now in preparation for this.

1. Identifying what the existing contingent workforce is. Who uses this within the business, what is it used for, how is it engaged and what are the roles being performed?
2. Having collated this information, consider where these workers employment status would now fall in the new regime. Some will clearly be inside and some clearly outside IR35 but there are likely to be a significant number who remain in between.
3. Consider whether the engagement with the contingent workforce can be changed i.e. can the way the business change or formalise their working practices to provide clarity as to IR35 statuses.

Only once, the above exercise has been undertaken can business start implementing their transition planning or to determine what the BAU position will be post April 2020.

Across our group we can provide support in each of the above steps as well as ensuring that businesses have a fit for purpose solution in place for next April.   

Find out about our IR35 consultancy service and talk to an expert about how you can mitigate any risks ahead of time.