IR35 changes will be enforced today – with businesses now responsible for setting the rules for contractors they engage.
Despite fears over how this will impact the cost of labour and talent flexibility – explored in full on a recent HR Grapevine podcast exclusive – at least one expert said this will not lead to the end of contracting.
‘Fears over contracting’
With changes resembling those seen in the public sector in 2017 – organisations will now have to set the IR35 status of contractors they engage as well as carrying the risk for a wrong assessment of that contractor – some feared that contracting might come to an end.
However, Seb Maley, CEO at Qdos, explained that whilst today is an “historic moment” there is no need to fear for the end of contracting.
He said: “The introduction of IR35 reform is a historic moment. It marks the culmination of years of the Government chipping away at contractors, who have shown tremendous resilience and a determination to continue working this way.
“But while reform poses challenges to contractors and the businesses who rely on them, I am confident that contracting will survive,” Maley added.
Over the past few years there have been widespread complaints with HMRC’s own IR35-status-determining tool – as well as successful, high profile challenges to rulings on IR35.
It has led some to query HMRC’s approach to the rules being applied.
For others, fearful at getting IR35 status assessment wrong, blanket bans have been placed on limited company contractors.
Yet, Maley believes that this approach is wrong and contracting and workforce flexibility will be increasingly needed due to current economic conditions.
He explained: “Despite IR35 reform and the problems the changes create, I am optimistic about the future of contracting. The economic climate, the changing makeup of the workforce and the growing demand for flexible, skilled and cost-efficient workers suggest contracting is here to stay in spite of these changes.
“In recent months the tide has turned, with thousands of businesses now aware of the fact that IR35 reform is manageable.
“These firms, who have prioritised compliant IR35 status decisions and will continue engaging contractors, are set to gain a huge advantage over those who have banned contractors because of the changes – a short-sighted and totally needless decision,” he concluded.