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Recruiters: Why IR35 Reform Changes Everything for Your Clients


Quite understandably, when we talk about IR35 reform, there’s a lot of emphasis on preparing for the deadline in April 2021. However, it’s important to realise that the changes will continue to affect your clients after April, and their preparations should include long-term changes in how they engage contractors.

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It’s not just about assessing IR35 status for existing contractors

IR35 reform represents a fundamental change in how your clients engage contractors and it can’t be managed just by ticking off a list of tasks before the deadline. Your clients will need new policies and processes, and not just to assess IR35 status. Their relationship with your contractors has to be managed and documented in a way that has not been necessary in the past. They’ll also need to manage appeals, and set up an audit process to ensure and demonstrate compliance.

The new policies your clients will need

Your client will need to decided when and how it’s appropriate for their business to hire contractors, and what their relationships with those contractors should look like. By deliberately taking control of these two aspects of their business and documenting the approach they intend to take, they can manage the risk and cost while ensuring consistency across their company.

Procurement and Engagement Policy

This policy is about when and how the client wants to engage contractors. It will help ensure that their hirer managers use contingent workers in the right way, in the right situations.

Contingent worker policy

This sets out what the client’s relationship with contractors should look like. For example, where contractors are deemed to be outside IR35, this policy will ensure the relationship remains a “business to business” arrangement, rather than “employee to employer”.

The new processes your clients will need

Following IR35 reform, your clients will need to set up processes to manage their new responsibilities. The recruitment process will also need to be adapted, to allow you to effectively market any new roles.


Most contractors will be unwilling to accept a role before they know how much they will earn from it. This means you will need to know what the IR35 status is likely to be before an individual contractor is assigned. The only way to achieve this is for the client to complete a “role-based assessment” so your contractors will know what to expect. Once a contractor is assigned, a re-assessment will be required to confirm all circumstances and practices line up with the expected status.

Ongoing IR35 assessments

Your clients will need to assess the IR35 status for each contractor they engage, both before the role is marketed (as above) and once the contractor has been recruited. Re-assessments will also be necessary whenever a contract is renewed or extended. It’s important that this process is as smooth as possible, so it doesn’t cause delays at a time when the client may urgently need additional skills or resource.

Appeals process

It’s likely that, at some point, your client and your contractors will disagree about the IR35 assessment. In these circumstances, your client will need a clear, documented process, so the situation can be resolved with a minimum of fuss and disruption.

Auditing and updating

It’s important that your clients are able to demonstrate “reasonable care” in assessing IR35 status, so they’ll need to take steps to ensure compliance with their new policies and processes, and document the steps they’ve taken.

Also, IR35 legislation and guidance has been subject to regular change since it was first introduced in 2000, so it’s also important to regularly update and review processes in line with any new developments. We recommend an annual audit, and a twice-annual update and review.

They’ll need expert help

IR35 compliance is a specialist field, and most end clients will need expert help to assess their position, and to design and implement the policies and procedures required to manage IR35 for their specific contingent workforce.

With our simple, intuitive assessment tool and ongoing support from our team of compliance experts, your clients will be able to prepare for April 2021 and ongoing IR35 management heading into the future.

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

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