What contractors should do with the IR35 reprieve

IR35 delay

To say it’s been an eventful few weeks would be an understatement and we know that our customers have a lot of things on their mind right now and that IR35 is probably the least of them. We understand that many contractors are happy that it’s been delayed until next April although frustrated at the distress it’s caused to date. Beyond that you’re more concerned with keeping yourself and your family healthy through the COVID-19 pandemic, and ensuring your business weathers this storm.

That being said, your IR35 status is something to keep eye on and make sure that, as a contractor, you take care of your responsibilities now and prepare for the changes now due in April 2021.

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Government announce IR35 reforms delayed until April 2021

Houses of parliament
In an unexpected move yesterday evening, the Government called a temporary halt to the introduction of IR35 reforms. Originally due to come into effect on 6th April, they have now been delayed by a year until April 2021 as the fallout from the spread of Covid-19 continues to become clear.

“This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals,” declared Steve Barclay MP, Chief Secretary to the Treasury in the House of Commons yesterday.

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Spring Budget 2020: what it means for contractors

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Contractors, recruiters, accountants, end clients and everyone else in the sector have been waiting with eager interest for the Spring Budget 2020 for a number of reasons. It’s the first Budget of the current Government, it’s the first post-Brexit Budget, it’s the first Budget for new Chancellor Rishi Sunak, and the last Budget before the ushering in of the IR35 private sector reforms on 6th April.

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Getting ready for IR35 webinar

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On 20th February 2020 Kingsbridge ran a webinar hosted by Kingsbridge’s own Legal Manager, Nicola Hayman, Matt Tyler from IR35 Specialists Larsen Howie and Andy Chamberlain, IPSE’s IR35 Spokesman.

The webinar was designed to be practical – arming contractors with information that can help them be proactive in preparing themselves and educating their end clients in the run up to 6th April. The session attracted a lot of contractors keen to ensure they’re ready for the IR35 reforms scheduled to be implemented on 6th April 2020 (just over a month away). For those who weren’t able to make it though, we’ve put together this summary of all the pertinent points or you can catch the full recording on Youtube.

(Information correct at time of recording: 20th February 12.30pm)

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Can IR35 be backdated?

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With the IR35 reforms now just over a month away, it really is time to get your house in order by checking your contracts and working practices to ensure you’re safely and legitimately outside IR35. If not, we recommend you have necessary conversations with end clients and recruiters to make sure everything is ship-shape for 6th April.

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An IR35 glossary to break through the IR35 jargon

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With just over a month to go until the new IR35 legislation kicks in on 6th April 2020, our key words are preparation, preparation and preparation.

A big part of being prepared for IR35 is understanding IR35. This may sound obvious, but the fact is there is so much jargon involved in the legislation that simply understanding what it all means can be a minefield in itself – especially for those newer to contracting. We’ve put together this glossary of the most-used key terms around IR35 so that you have a go-to guide should you find yourself wondering, “Mutuality of Obligation? What on Earth does that mean?”

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Should you work under a Statement of Work?

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It’s likely that, as a contractor, you’ve not heard of a Statement of Work (SoW) before and there’s not really a reason why you should have. Until recently, they weren’t particularly commonplace but as we hurtle towards the implementation of IR35 reforms in the private sector, they’re very much on the rise.

There is one very good reason for this; SoW agreements – formal arrangements put in place to guarantee work carried out by a contractor for a client is delivered in line with particular standards and expectations – heavily suggest an outside IR35 status, and can even act to move any potential IR35 responsibility and liability down the supply chain away from the end client.

So, now we’ve piqued your interest, sit back while we explain all about Statements of Work and why you might use them.

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Kingsbridge preparing recruiters for the IR35 reforms

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On Friday 29th November , Kingsbridge played host to an industry insight event in London designed to prepare recruiters for the 2020 private sector IR35 reforms and launch Kingsbridge’s long anticipated IR35 insurance solutions.

Chaired by Ann Swain, Global CEO of APSCo, the event saw two panels of experts answer questions on the upcoming reforms and what they mean from a recruiter’s perspective. The event was not to be all doom and gloom. Instead it was about exploring solutions and new opportunities, and how Kingsbridge are leading the sector in overcoming the negative reactions to IR35.

Tax & Legal

The day began with the panel discussions. The first panel focused on tax and legal matters and included Andy Vessey (Head of Tax, Larsen Howie), Nicola Hayman (Legal Manager, Kingsbridge), Tania Bowers (General Counsel, APSCo), and John Chaplin (Associate Partner, EY People Advisory Services).

A quick show of hands demonstrated that not many people in the room felt prepared for IR35, which, according to the panel, reflected the much more general picture across the UK’s recruitment market. Chaplin pointed out that many of his clients were only in the early stages of preparations and time was running out, especially since recruiters, as fee-payers, are the party liable for ensuring correct tax is paid. After hearing from everyone on the panel, it emerged that recruiters should see this as an opportunity to reposition relationships with their clients and they can do this through taking the lead on communication, ensuring the supply chain is engaged, educating end clients and contractors, and offering solutions to clients to they can be guided through the changes. As Hayman puts it, leaving clients to panic will just result in them saying they don’t want to use contractors anymore.

Commercial & Industry

The second panel had a focus on commercial and industry issues and was made up of Thomas Wynne (Managing Director, Kingsbridge), Charlie Cox (Commercial Manager, SThree), Richard Harris (Chief Legal Officer, Resource Solution), and Julian Ball (Legal Director, PayStream).

The panel quickly established that the response of banks should not be seen as reflective of the wider UK market – contractors will still have their place in the workforce. Recruiters, then, should set about making themselves as appealing to the best contract talent possible. The panel also discussed that, while scope of work contracts may become increasingly common, they should not be seen as a ‘magic bullet’ for avoiding dealing with IR35. Proper determination still needs to be carried out. Again, communication and a proactive approach from recruiters emerged as a theme, but the panel also encouraged reflection on the part of recruiters, to look at their supply chain and ensure they’re running a tight ship. After all, liability sits with them.

 

IR35 Protect Insurance

The day ended with Thomas Wynne unveiling Kingsbridge’s brand new IR35 insurance solutions, which are now available on the Kingsbridge website. The three IR35 Protect packages have launched alongside our revamped Legal Expenses cover and offer three options to contractors: Essential, Standard, and Premium.

They offer everything our Legal Expenses Cover does, with the addition of £100,000 of cover for taxes and interest from HMRC, and penalties from HMRC. Standard and Premium, also offer the option of IR35 Assessments by our expert panel. Standard offers one review, while Premium gives the luxury of unlimited reviews. They remove all tax liability from the recruitment supply chain and can be purchased by anyone in that supply chain, but will protect everyone by indemnifying the party deemed liable under the legislation. Even better, the policy doesn’t change if the end client changes through the year, as long as the role is not materially different.

Kingsbridge are hosting an Industry Insight webinar on the 17th December. Nicola Hayman (Legal Manager) & Thomas Wynne (Managing Director) will go into detail about IR35 Protect and also summarise discussions that took place at the Industry Insight event.

Industry Insight Webinar

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