7 Weeks on, How Is Looming IR35 Reform Affecting the Contractor Market?

IR35

On 29th October, Philip Hammond announced that the long-expected reform of IR35 in the private sector will go ahead in April 2020. This has created a significant challenge for any business who hires contractors: How will they attract and retain high quality contractors without allowing their costs to spiral?

Many end clients are aware that something is happening, and want to understand what it is and how it affects them. They’re asking recruiters for help, and those recruiters need to engage experts to guide them and their clients as they assess their risks and implement new processes.

How is the market reacting to upcoming IR35 reform?

From our position as compliance experts, we’re seeing three distinct approaches from our recruiter partners:

The quick starters

Some of our partners, most often those who have been affected by similar reform in the past, have been quick to recognise the need to act and keen to get started. In some cases, they’ve been working with us since before the announcement to find solutions for their clients and they’re now ready to begin implementation.

The slow starters

Then there are some recruiters who are reluctant to allocate resources now to something that will happen in 2020. Instead, they’re concentrating on today’s business-critical issues and intend to “get around” to taking action closer to the time. They’re trusting to luck that they’ll have everything in place and will be able to advise their clients in time.

The cautious strategists

The middle ground is occupied by recruiters who are prepared to move quickly but are waiting to see what the market does before they decide what action to take. This group have been asking us for insights into what’s happening in the market, particularly what the prevailing strategy will be.

Some in this camp are hoping to create a competitive advantage by offering just what end clients need at just the right time. This obviously requires insight into what those needs are, and when most end clients will need to begin their preparations.

What strategy would we recommend?

While we understand the need to conserve resources and plan efficiently, we’d advise recruiters in any of the second two camps to move forward with all speed. In our experience, each client is different and it will take time to evaluate their needs, suggest appropriate solutions and then implement them. Some clients move more quickly than others, and some will need more help with the how, the why and the when. Moving now gives everyone the best possible chance to be ready in time.

In our opinion, all recruiters who engage contractors through limited companies need to do two things as soon as possible:

  • Talk to your clients about IR35 reform. They need to know that it’s coming, that it will affect their business and that they need to prepare.
  • Partner with compliance specialists who can supply the expertise you and your clients need.

How we can help?

As compliance and contractor-management experts, Orange Genie Compliance are well placed to help you and your clients prepare for private-sector IR35 reform. We can assess your clients’ particular situation and risks and help them create robust processes in response without causing delays or disrupting the supply chain. In addition, we can provide bespoke training and guidance to help them educate their staff and contractors.

If you have any questions or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.

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