In April 2017, the IR35 reform was implemented for the public sector. There were several teething problems with the implementation as the public sector organisations had insufficient time to prepare for them. With the government pushing for IR35 to be introduced into the private sector, it is a foregone conclusion that it will eventually happen.
Tax experts over at ContractorUK have insisted the private sector should begin preparing now so that it is not burdened with high costs and avoidable risks and can access talented and skilled contractors or freelancers with ease.
The public sector was given merely four months to implement the changes from the publication of the draft legislation. So, public sector organisations did not have adequate time to read, understand, and plan the changes for them. Since similar changes will be introduced in the private sector, organisations will find it difficult to hire cost-effective contractors for important projects, such as digital transformation, if they are unprepared.
Changes to the IR35 legislation will alter how organisations in the private sector use freelancers and contractors. So, the time is ripe for these organisations to check their processes and find ways to use contractors and freelancers in a more efficient manner.
The experts recommended that organisations begin by taking a few necessary steps to prepare for the IR35 reform, which will sooner or later be introduced into the private sector.
The first step should be for organisations to check the systems and processes they would need in place to gain access to the skilled independent workers they require. By getting these systems and processes streamlined now, it would ensure organisations avoid problems when the IR35 reform comes into effect. They will then be able to access the contractor or freelancer in a compliant manner.
They went on to suggest that private sector organisations should consult recruiting experts to carry out an audit to give a clear picture of their risk when their business comes under the purview of IR35 reforms.
Lastly, organisations should realise the value addition that contractors offer their business. Contractors often have skills and expertise that employees lack, helping to deliver important projects and programmes. So, they are more important than organisations believe, which is why it is necessary for companies to look at ways to utilise contractors effectively so that it is a win-win situation even when IR35 reforms are introduced.