An IR35 Q&A with our in-house expert
At Quanta, we’re well aware of the upcoming changes to IR35 regulations and how these may impact you. We’ve appointed our Compliance Executive, to oversee the IR35 process we’re undertaking as a business. She sat down with us to answer some questions about the new changes.
How did you become involved with IR35 at Quanta?
“As Compliance Executive it makes sense for me to get my head around IR35, and to be honest I’m excited to take it on. I love legislation and looking at how best to implement new rules for Quanta and our clients and candidates.”
What do you think the benefits and challenges of the new regulations are?
“An obvious benefit is that both candidates and clients have more clarity around IR35. If you’re compliant with the new legislation and understand your role in it, then you shouldn’t run into any difficulties such as backdated taxes further down the line. This gives everyone the opportunity to be compliant from day one, coming into line with other countries with similar legislation and ensuring everyone knows where they stand.
As far as challenges, there is a level of uncertainty, particularly for contractors whose status may change with the new legislation. Those candidates who will now fall inside IR35 may disagree with their new status or consider switching to permanent roles as their take-home pay will change. In extreme cases, there is also the risk of being taken to an employee tribunal if contractors feel the status change is unfair. Another challenge is that some employers might attempt a blanket ban or ‘one size fits all’ approach when setting IR35 status for their contractors. However, a new requirement of the reform is that reasonable care must be taken, and I believe that blanket bans aren’t in line with that.
The best way to mitigate these challenges is through education and reassurance. That’s why we’re getting on the front foot to ensure all affected parties understand the changes and how they might be impacted, educating both candidates and clients on the best way to go about any changes.”
How will contractors know whether the new IR35 changes impact them?
“We believe that communication before April 2021 is key, and our main focal point is ensuring our contractors are as informed as possible via our soft audit, webinars, Q&As and candidate care calls. It’s vital that people are aware of their status and their workforce well before the new rules come into play next year.
After the April 2021 start date, roles should be advertised as inside or outside IR35 from the outset. This will save queries down the line and ensure applicants know exactly what they can expect.”
What can contractors and clients do to prepare themselves for IR35?
“The best thing to do is prepare, plan and read up on the legislation. Confirm working arrangements with your agency if you’re a contractor. Think about small changes you can make now to make it easier when it comes to confirming your status – such as updating your email address to show you’re clearly an independent contractor – and bigger changes such as finding opportunities to work from home or an external office to show you’re not effectively acting as an employee.
For clients, the plan, prepare and read up message is the same. You need to be aware of the potential changes in your workforce come April 2021. If you understand your position now, work with Quanta on the soft audit and understand where your contractors might fall in regard to the new regulations, it will be much easier to meet the regulations head on. “
What advice do you have for people regarding IR35?
“It’s not as large of a change as it may seem. This has already been rolled out across the public sector and we’ve seen the results there, so we can learn from this and ensure we’re better prepared. Make sure you give yourself ample time to understand IR35, examine your workforce and understand both the negative and positive impacts it may have.
Another piece of advice is to work with agencies and other parties involved in the IR35 process. Although clients now hold the cards in determining status, they should work with agencies to ensure reasonable care has been taken, and the contractor should be involved in this process too – particularly to avoid employment tribunals down the line.
Contractors should consider the financial implication of IR35, talk to their accountants if they have one and look into using umbrella companies if they are moving to inside IR35.”