Government announces IR35 review – but don’t wait for final legislation to act

Last week, the Government announced they are launching a review into the implementation of IR35 reforms in the private sector, a move that will no doubt have many contractors excited at the thought of delays to, or even the cancellation of, the changes. However, before you and your clients go popping open the champagne, we recommend taking a look at the wording of the announcement and continuing to prepare for the incoming reforms as if nothing has changed.

Announcing the review, Financial Secretary to the Treasury Jesse Norman said: “We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules. The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.”

It appears, then, that the Government is still very much committed to the reforms launching 6th April and that this review is into how they will be implemented, rather than into the reforms themselves.

Kingsbridge’s IR35 advice

At Kingsbridge, we’ve been watching the IR35 reforms closely. Our Legal Manager, Nicola Hayman, had this to say on the review announcement:

“While we welcome the fact that HMRC has recognised a need to take another look at how these changes will be implemented, there is no escaping the fact that it is now too late for a thorough review of the proposed reforms.

“Furthermore, the Government’s admission that the purpose of this consultation is to make ‘sure that the implementation of these changes in April is as smooth as possible’ confirms that any delay is extremely unlikely.

“With this in mind, we are urging the businesses that we partner with to continue to prepare for incoming reforms – there simply isn’t time to wait for the outcome of the review and final legislation.”

In short, don’t wait to see if this review changes anything as it’s highly unlikely that it will. Just carry on making preparations in time for 6th April to ensure a smooth transition for yourself and your clients.

What will the impact of IR35 be?

At Kingsbridge, we’re hopeful that the effects of the IR35 reforms will be minimal and it’s up to recruiters to communicate this to their clients so that they don’t miss out on the amazing talent pool of contractors out there. As Hayman puts it:

“Contractors represent a vibrant and increasingly important part of the UK economy, and this point further emphasises the fact that there is no reason why companies should be concerned about continuing to engage with this talent pool after April.

“Even when using HMRC’s own calculations, the vast majority of PSC contractors are genuinely self-employed – and recruiters should communicate this fact to any clients who may be spooked by the recent flurry of blanket bans so that they don’t consider implementing their own veto on contractors.

“In our experience, good recruiters are happy to place genuine contractors outside of IR35, and will work with employers to determine the status of these individuals, helping the client to overcome reasonable care requirements.”

 

For more information, please email IR35@kingsbridge.co.uk.

 


 

Kingsbridge preparing recruiters for the IR35 reforms

Industry Insight event_Kingsbridge

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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IR35: Lessons learned from the public sector

With less than 6 months to go until the off-payroll rules are introduced to the private sector, it is more important than ever to continue educating the market. Let’s not forget the impact these changes had when they were introduced to the public sector back in April 2017. Kingsbridge asked a number of experts including John Chaplin, Frances Lewis, Andy Vessey and Dave Chaplin what lessons we could learn from the public sector to help better prepare us for April 2020.


Preparing for April 2020: The Kingsbridge report

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PREPARING FOR APRIL 2020 : The Kingsbridge report

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IR35, and particularly forthcoming IR35 reform in the private sector, is inarguably the single most prevalent issue impacting the contracting community right now. The reforms, due to come into play from April 2020, are set to affect all parties in the contracting supply chain – from contractors themselves, to accountancies and recruitment firms, and all the way through to the end client. But, with the right preparation, you can avoid potential pitfalls.

That’s why Kingsbridge Contractor Insurance have put together this report. Featuring in-depth analysis of what the changes mean, as well as how to deal with them, the document provides a comprehensive overview of all the important issues that will arise in the coming months, alongside expert commentary from a number of prominent industry figures.

All you need to do to download a copy is fill in the form above. If you want to know more about IR35 and how we can help, it’s easy to get in touch. Contact Head of Business Development; Andy Robinson by emailing  andy.robinson@kingsbridge.co.uk or call 01242 808 740.

What is IR35?

IR35 experts explain exactly what IR35 is. Hear from Larsen Howie’s Andy Vessey, APSCo’s Tania Bowers, Osborne Clarkes Frances Lewis and John Chaplin from EY.


Preparing for April 2020: The Kingsbridge report

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