Are you more prepared this time around for IR35 impact?

Companies were in various states of readiness for the IR35 changes due in April of this year, until the last minute delay. Although there have been further discussions recently, it has been made very clear by the Chancellor that IR35 changes will be in place for April 2021.  

As the contracting landscape adapts to the impending IR35 changes and the on-going impact of Covid-19, clients and candidates need to consider new ways of operating and consider options available to them. Think about questions like:   

• Are companies more likely to consider fixed price contracts through PSC to get better value going forward?
• The impact of Covid-19 on contract rates, will this result in the market splitting between fixed price work and fixed term contracts?

Some companies are enforcing a blanket ban of PSC within their supply chain, however if you are undecided, you need to start taking action. 

For those who will be faced with contractors assessed as ‘outside IR35’ the options are:

• Statement of Work - A statement of work (SoW) is referred to as the narrative description of a project's work requirement. It defines project-specific activities, deliverables and timelines for a vendor providing services to the client.
• Contract for Services - A contract for services is a formal, legally binding agreement before a business and a self-employment individual.
• Assessment & Insurance - Both a Contract for Services and a Statement of Work need to be assessed and insured.

For those who will be faced with contractors either, assessed as ‘inside IR35’ or unable to operate through a PSC on specific contracts, the options are:

• PAYE - Similar to permanent employment in terms of tax but without the benefits. Makes limited company set up redundant. Costs can be more expensive as employers NI & pension needs to be factored in. Contractor may ask for additional tax burden to be covered through an uplift in rate.
• FTC/Umbrella - Can work as a compromise between contract and permanent hire. However, it can be harder to find resources willing to work in this way. Lacks the benefits connected to permanent roles or uplift you see on contracts through Limited Company. Workable if the salary on offer sits between permanent salary and a contractor rate. The individuals need to work through umbrella company under this scheme

At Savant we are keen to hear your thoughts and how you feel the market will evolve going forward. How will you source your talent pool and take advantage of the changes taking place right now?

Update after 3 months: 

With the new reforms to IR35 being effective for the last 3 months, organisations have moved from the initial planning phase through to the implementation and ongoing support phase. 

This includes conducting individual assessments to ensure consistent and clear communication throughout the workforce supply chain, regular re-assessments, as contracts evolve, with contractors finding their assignment or working practices change, classifying them as ‘inside’ IR35. We’ll help you monitor contractors and conduct re-assessments for total compliance.

Here at Savant we offer our clients:

• Role assessments
• Ongoing advice & consultancy from experts
• A range of working options for contractors 
• Fastest IR35 assessments available with insurable results
• Training & implementation support

Please get in touch for advice on how to generate a compliant Status Determination Statements (SDS), detailing the assessment outcome, creating a Statement of work outlining deliverables to a range of working options for contractors in order to retain talent and plug resource gaps.

We are here to assist you if you require expertise as part of your preparation for IR35 or any of the points covered here, Please contact Mehran Yadegari, Managing Director of Savant Technology (mehran.yadegari@savantrecruitment.com or 07874 178 197).