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Posted 28th February 2019

Six steps to prepare your agency for IR35 changes

With just over a year to go before IR35 reforms are set to transform the way in which agencies engage with contractors in the private sector, many are looking at how they can adequately prepare for these changes to ensure compliance with legislation.

For a number of businesses, the prospect of preparing for IR35 can be daunting, and with good reason after the introduction of these same reforms into the public sector caused significant issues for contractors and businesses alike.

In light of this, effective preparation for these changes is vital to ensuring the same mistakes are not repeated, as this could have far-reaching repercussions for industries across the UK. Below we will take a look at some of the steps that your agency can take in preparation for April 2020.

preparing for IR35 changes

1. Start preparation early

One of the main issues that businesses faced following the introduction of reforms to the public sector, was lack of awareness, research and little to no preparation to implement new procedures. Ideally businesses should have already begun to consider their options, and plan how their business will adapt to these changes.

2. Know the history

Previously agencies would have very little to do with any IR35 decision, this was left to the contractor themselves, and as a result many have limited knowledge on what the legislation entails. We would highly recommend first and foremost, to learn the history behind IR35, why it was introduced and what it means for contractors.

3. Understand blanket assessments

Another issue that plagued public sector contractors was the blanket assessing of status by many businesses, leading to countless contractors being placed within IR35 incorrectly and subsequently forcing many to take companies to tribunals in order to get their lost income back. We recommend ensuring a clear understanding of blanket assessments and how to avoid them.

4. Review government guidance

The promise of detailed guidance prior to the introduction of private sector reforms will provide a comprehensive and invaluable resource for businesses to refer to when reviewing current procedures and implementing changes. Whilst this guidance has yet to published, we are likely to see this over the coming months.

5. Perfect your paperwork

It is vital that once changes come into force in April 2020, any IR35 decision your agency makes must reflect accurately in each and every piece of paperwork. This will not only include contracts and terms and conditions between your agency and the contractor, but the contractor and the end client.

6. Ask the experts

From our experience, many agencies are still relatively in the dark about how IR35 is likely to impact their business, and therefore we would highly recommend you seek expert advice. The right guidance will not only help to support your agency in navigating the tricky waters of IR35 legislation, but also to provide a comprehensive contract review to ensure that your agency is off to a compliant start from the outset.

Here at Exchequer Solutions have supported countless recruiters through IR35 regulations, if you are looking for expert guidance please get in touch today.

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