As more than half of the recruitment agency bosses are uncertain regarding the new rules for the IR35 in the private sector, YunoJuno’s research reveals that four out of 10 agency bosses that regularly hire contractors and freelancers do not know the impact of the IR35 rules’ extension on their business.
Almost 42% of bosses are oblivious of the non-compliance fines pertaining to the rules. Around 40% of bosses believe that the impact on their business can range from moderate to severe after the rules come into effect in the next April. Additionally, 24% of bosses stated that they are planning to put their projects on hold because of the changes. However, some recruiters have done their homework to address these changes.
Jeni Sykes, the chief financial officer from E1EW, studied the effect of these rules on her business and has worked out a plan with clients that can help them to negate the risk and impact that the new rules bring to the table.
At first, they intend to cooperate with customers to make sure that individual reviews are performed for all those workers who use a PSC (personal services company). Then, the review’s outcome will be documented and shared with their customers to keep them in the loop. In case, changes are required on the payment of workers, they will work together to make sure that they use a compliant and cost-effective solution.
Sykes further explained that for the agency, it is imperative to efficiently and correctly implement these new rules, individual checks must be carried out while at the same time they have to steer clear of blanket decisions that are applied on the workers.
The managing director at First Point Group, David Taylor, explained that his agency also plans to engage their customers, briefing them about how the IR35 changes work and also advising them on what can be done to gear up for the challenge. Meanwhile, they also await the release of HMRC’s final guidance, scheduled to be released on 11th July in order to adjust their planning. He stated:
“As ‘in’ or ‘out’ will ultimately be determined by the end client, once they/we are further down the road with these determinations (and actions the client may or may not take to mitigate/make up for these) – we will then more engage with the contractors to give them clarity and options… This will be a shakeup to the UK contractor market.”