Thousands of recruiters and hiring firms preparing for IR35 reform extension
Over 2,200 recruitment agencies and hiring organisations are set to be ready for the rollout of the off-payroll tax reforms in the private sector next year and will prioritise fair and well-informed IR35 assessments, statistics released by IR35 specialist, Qdos, demonstrates.
Changes to the IR35 legislation will see medium and large private sector companies become responsible for administering the tax status of contractors from 6th April 2021 – the reform was due to be enforced in April of this year but was postponed for 12-months due to COVID-19. Last week, at the Committee Stage of the Finance Bill, MPs accepted the 2021 rollout.
As part of the incoming changes, a similar version of which was introduced in the public sector in 2017, recruitment agencies handling payments to contractors on behalf of the hiring organisation will become liable for IR35 on 6th April 2021 also.
With 10 months until these changes reach the private sector, information gathered from Qdos’s Status Review facility, designed to help recruiters and hiring organisations successfully manage public sector and private sector reforms, shows that thousands of companies are preparing to make well-informed IR35 status decisions:
More than 2,200 hiring organisations and recruitment agencies are currently or preparing to assess contractors’ IR35 status through fair, objective and independent contract reviews.
To date, 9,000 contractors have had their IR35 status administered in this manner, via the Qdos Status Review tool.
87% of these determinations were deemed outside IR35 (with the majority of these decisions protected by IR35 insurance).
Qdos CEO, Seb Maley, commented on the findings:
“While needless and short-sighted, IR35 reform is manageable if businesses take a measured approach to the changes. As disappointing as it is that these changes are going ahead, it’s positive to see that thousands of recruiters and hiring organisations are prepared to do the right thing and prioritise accurate status decisions. This will ensure genuine contractors can be engaged legitimately outside IR35 beyond next April.”
“Now, with less than a year until the changes arrive in the private sector, it’s vital that companies yet to start preparing do so immediately. Meanwhile, firms banning contractors, forcing them onto the payroll as a workaround to the changes, should rethink their stance on IR35 reform.”
Seb Maley will be outlining how recruitment agencies and hiring organisations can manage IR35 reform in a free webinar taking place on 1st July 2020, between 11am – 12pm. For more information and to register, please click here.
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