IR35 Reform: What’s happening now?

IR35 Reform: What’s happening now?

After a 1 year delay, the long awaited IR35 reforms in the private sector were rolled out on 6th April. Much controversy has surrounded the reforms, and whilst HMRC believes that the public purse misses out on £1.3billion from non-compliance, many believe that the new rules are unworkable.

The Reforms affect anyone who utilised their own limited company to contract through. The main change sees the end client taking on the responsibility for determining whether a contract is inside or outside IR35. However, the complex nature of the IR35 rules makes determinations difficult and has often resulted in confusion. With the business sector still recovering from Covid-related losses, many commentators felt it was the wrong time to introduce the rules.

For contractors working through an umbrella company and unaffected by IR35, their situation has not changed. They may even be at an advantage as they can go about their business as usual without having the inconvenience of having to negotiate with the end client.

One week into reform and there’s been a lull in IR35 activity as the new rules bed in. It’s still early days to judge the impact, with end clients adjusting to the implementation. While there will have been a marked increase in the number of inside determinations, we’ll have to wait for the first set of data to get a clearer picture.

Meanwhile, the REC’s chief executive Neil Carberry commented that ‘hiring has bounced back in a big way’. As the UK emerges from lockdown, major skills gaps are appearing across many industry sectors. With little time to train staff, supply isn’t matching up with the sudden demand. This means that businesses are looking to the flexible workforce to plug these gaps fast.

Economic uncertainty has been created by the pandemic and the UK’s departure from the European Union. This means that access to flexible skills is critical for businesses to recover in a way that’s sustainable. Demand for IT contractors surged in March to its highest level since 2018, as businesses started to bounce back. Contractors with digital skills are also needed as the shift to ecommerce sees firms looking to improve their online presence.

With flexible workers playing a key role in recovery, many contractors are turning to umbrella companies to ensure they’re working compliantly. Amaze’s Umbrella service has undergone rigorous assessment to attain FCSA accreditation, giving you a fully compliant IR35 solution. Our service also offers benefits of employment that permanent staff receive. Included are Perkbox* benefits, insurance cover and a seamless onboarding experience from our first-class customer service team. To speak to a member of the Amaze team see here.

*Perkbox services are available to contractors paying the qualifying service fee. Please contact us for information.

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