With millions of private sector representatives awaiting an expected announcement in the autumn budget that rebooted IR35 regulations will be applied to their employment practices, a leading tax advisory service for contracting professionals is reassuring all concerned that such a development can be managed without the damage seen in the public sector.

Qdos Contractor recently polled 652 UK contracting professionals and found that 63% believe a roll-out of IR35 to the private sector can be managed effectively. Despite recent tax changes and the damage caused by the IR35 reforms in the public sector, 61% believe that the flexible, independent workforce will continue to expand.

Recent data from the Association of Professional Staffing Companies (APSCo), however, found that a huge majority (78%) of its member recruiters believe that an extension of IR35 rules to the private sector will undermine the UK’s ability to utilise flexible workers.

The new rules would transfer responsibility for determining a freelancer’s employment status from individual contracting professionals to the employing organisation and recruiters who sourced them.

Public sector organisations have made significant errors in their handling of the changed reforms, with some imposing blanket “inside IR35” determinations on personal service company contracting professionals. But, Qdos Contractor has called for composure and urged all those likely to be affected by a private sector roll-out to take the initiative, should the extension be announced as expected in this month’s budget.

Qdos Contractor CEO Seb Maley told the online staffing industry news source OnRec, “Despite quite understandable concerns from recruitment agencies, likely changes to IR35 in the private sector can in fact be managed. We must use the public sector as a roadmap for managing expected reform in the private sector.”

He proceeded to point out that Qdos Contractor’s work with many recruitment consultancies and public sector bodies had enabled the continued use of flexible workers by making accurate IR35 determinations based on case law, not HMRC’s flawed online “Check Employment Status for Tax” (CEST) tool.

Mr Maley stressed that determinations should instead be conducted by independent IR35 experts on a case-by-case basis. When assessed like this, 89% of the contractors Qdos worked with were able to continue operating outside the IR35 rules.

He added:

“Preparation is key, and recruitment agencies must now take the initiative by opening discussions with the contractors they place, and begin to think about how they will contribute to well-informed IR35 decisions. The cost of blanket and inaccurate IR35 decisions in the sector would ultimately be huge to agencies and the UK’s millions of private sector companies.”

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