Government falls short in preparing firms for IR35 changes, says IPSE

IPSE
Andy Chamberlain

The government has not done enough to prepare businesses and the self-employed for the changes to IR35 coming into force next April, the Association of Independent Professionals and the Self-Employed has warned.

The warning comes in response to research by Hays, which shows a third of private sector organisations that engage temporary contractors are unaware of the changes to IR35 next April. It also found less than half (43%) of medium and large private sector organisations who engage contractors have begun preparing for the changes.

Of those who have heard about the changes to IR35, 68 per cent believe the biggest risk is an increase in costs, while 56 per cent said they were worried about losing key talent. 46 per cent also said they believed the changes would make it harder to engage temporary contractors.

Andy Chamberlain, Deputy Director of Policy at the Association, said: “It is clear the government has done nowhere near enough to prepare businesses and contractors for the changes to IR35 next April. Not only do a third not know anything about them; those that do are extremely concerned – and with good cause.

“The nightmarish complexity of IR35 will result in significant extra administrative burden and cost for hiring organisations. Compliance with the rules is clearly going to be an uphill struggle for businesses across the UK.

“Hirers must not, however, be tempted to do as several banks have and either scrap their contractors or force them onto the payroll. This is a hugely damaging and short-term step that will stifle their flexibility and come back to haunt them later.

“The changes to IR35 caused chaos in the public sector in 2017 and they are set to do even more harm to an under-prepared and deeply worried private sector. IPSE is calling on the government to urgently halt and rethink these plans.”