Industry Analysis

Impact of IR35 one month on

Written By
Andy Bristow

It’s been a month since the roll-out of new IR35 guidance to the private sector.

For anyone who’s missed this, essentially the requirement to determine IR35 status has shifted, and the risk with it, away from the individual contractor to the end client first and the agency second.  

This has been a highly contentious move that was delayed from the original implementation date of April 2020 when the pandemic struck, and whilst there’s no doubt this has caused some consternation on the part of contractors and companies who have previously used limited companies, the early evidence suggests that the changes will prove to be a success in the long run.

This may not be a particularly popular viewpoint at present but the sharpening of minds over whether a contractor is genuinely engaged to deliver a specific project or is being used as an ad-hoc resource, has resulted in a much clearer thought process by clients on how and why they wish to use a contractor. With an acceptance by contractors that with the matter now taken out of their hands they have a clear choice to make; either take outside IR35 contracts only or accept the personal taxation levels that come with an inside IR35 contract. 

I dare say that for some contractors this removal of responsibility will come as something of a relief and it seems that the changes will bring clarity to a part of the market that has always operated in something of a murky area.

Want to know more or ask any questions? Get in touch with Andy or a member of the team today.