Six months ago IR35 reform was made across the private sector. And similar to GDPR in February and March this year we had a lot of noise with agencies, end users and contractors all working hard to be compliant for the 5th April 2021 deadline. While this all seemed to go quiet over the summer, those paying closer attention to the IR35 world would have found that quite a lot has happened.
April 2021 – IR35 is implemented in the private sector.
May 2021 – Gary Lineker appeals £5 million IR35 tax bill. HMRC target Gary Lineker in £4.9m IR35 case - Contractor Weekly
July 2021 – DWP fined £87.9million IR35 bill. DWP faced with £87.9m tax bill for incorrect IR35 status determinations (peoplemanagement.co.uk)
August 2021 – HM Courts & Tribunal Services reveal a £12.5million tax bill for 20/21 for incorrectly determining the IR35 status of contractors (HMC&TS is reported to have relied on substitution which is risky!) HM Courts and Tribunals Service pays £12.5m bill for IR35 failings - Personnel Today
September 2021 – HMRC begin to contact organisations engaging with contractors focusing on the financial services and oil and gas sectors. IR35: Soft Landing, What Soft Landing? - IWORK
October 2021 – Court of Appeal’s decision in Stuart Delivery Ltd v Augustine confirms substitution as a reason for outside determination should not be relied upon. Risks of overreliance on substitution in IR35 status determinations - Osborne Clarke | Osborne Clarke
So what does this tell us?
IR35 is a very technical subject with lots of intricacy and details. Understanding all of the case law and interpretations of legislation requires a doctorate in itself, so it’s easy to understand why people may shy away or delegate decisions.
However, with the market BOOMING – APSCo reporting a 17% month-on-month rise in contractor recruitment in September – are end-client organisations getting the best available skills? Is IR35 still hampering your efforts? Are you putting yourself at even more risk by heading into an unsuitable SOW arrangement for resource? With the rush to making determinations have many organisations lost sight, or even control of their IR35 process as it’s transitioned into BAU?
At Investigo Group we want to help our clients get this right. Support our clients with making the right and most compliant decision.
So over the coming weeks we’re releasing a series of articles designed for talent communities to help them understand, demystify and sanity check their process and management adoption for IR35.
Watch this space for more to come but please contact us should you be concerned about your IR35 process!