The wait is over for the contracting and recruitment industries today, as the government has announced what the near future holds for IR35 legislation, within this year’s Autumn Budget.
The long-awaited announcement follows months of speculation that IR35 reforms will be extended into the private sector, and now it has been confirmed, with changes set to be introduced in April 2020. However, following a consultation, it has been decided that changes will initially only apply to large and medium-sized businesses.
What are the IR35 reforms?
Reforms to IR35 legislation were first applied to public sector contractors back in April 2017. The reforms saw the responsibility for determining IR35 status move from contractor to end client or agency. Ultimately this meant that a contractor, prior to the commencement of any contract, must first have their IR35 status established by the end client or agency, so that the appropriate tax can be deducted if required.
Following the introduction of the reforms, the government began to assess the viability of extending into the private sector, with a consultation held between May and August of this year to encourage input into how these reforms could be implemented.
How will reforms impact contractors and agencies?
Reforms to the public sector resulted in a number of issues for both contractors and the businesses determining IR35 statuses. Blanket assessments, incorrect statuses, contractor walk outs and a number of other issues plagued the public sector following its introduction, therefore it is essential that contractors and businesses alike ensure they are fully prepared for these private sector reforms and understand the impact that they will have on their day to day operations.
With a year and a half to prepare for these reforms, more time than previously expected, the team at Exchequer Solutions are actively supporting our agency clients to ensure they are clear on what the changes will mean, and how they can remain compliant from the get go.
Speak to our team today to discover how we can support your business in preparation for these changes.