IR35 – Our Take on the legislation

30th September 2019

Amy Murgatroyd

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IR35 – 2020! Is it the biggest impact and change to our way of life since the Financial Crisis of 2008? Or it just a Red Herring, likely to scare monger clients and self-employed consultants into changing the way we structure our working life and charge for providing specialist services.

Over the last 12 months, I have been one of the key members of Strategic People, travelling to clients all over the UK and Europe offering free Q&A, training and discussion sessions on IR35, providing my knowledge and connecting them to Accountancy and Legal experts of IR35, documentation, setting up networking events for candidates and arranging key businesses in the North West to connect and discuss findings, successes, failures and challenges of making changes within IR35.

This hasn’t been without its challenges, firstly to understand the regulation and the impact it will have on the way our service is used by many fantastic clients across the country that benefit from a flexible work force model and a model that allows experts to come into their business, add value, achieve a result and leave – with minimal fuss and energy wasted.

One thing that has been a very common value among managers, business leaders, procurement and HR professionals – is the regulation cannot be argued.  In theory, it feels fair and if applied correctly will have the right amount of impact to make positive changes to both the market and their organisations.

But here lies the problem – “if applied correctly”.   It is such a big challenge for us! Where do we start?  I think it doesn’t impact us!  It’s not me looking at this, I think it’s the HR team.  We’ll get round to it I’m sure.

Two things made me want to write this blog.  Firstly, to outline how a number of organisations have made some quite straight forward changes in order to comply, and secondly the clear and demonstrable benefits organisations will release if they apply the legislation, make the necessary changes to their hiring, on boarding and management of contractors.

Decorative Scales of Justice in the Courtroom

Winning formula for complying:

// Centralise the responsibility to 1 or a number of colleagues who will own the project (as you would with any regulatory project)

// With an immediate effect, utilise a reputable and trust worthy agency to get any contractors you payroll directly through a 3rd party

// Delegate that each Hiring/Line manager of interim consultants MUST have a clear deliverable to achieve. Included in the contract and agreed by the provider and the client.

// Agree a process internally that is rolled out and governed that ensures contractors are not line managed, but held to account to achieve the deliverables.

// Processes should also be clear that contractors are not part of the workforce and therefore should not be getting benefits such as car parking, Christmas party invites, team building benefits (there are more of these but hopefully you get the point)

Benefits to realise as a company compliant with IR35:

// No cost for contractors benefitting from employee benefits

// Individuals who are inside of IR35, there usually is a cost saving

// Clear governance and control of contractors and an understanding of who is in the business and what are they delivering

// Competitive edge. Should your legislation and processes be water-tight, this will be a really attractive proposition for the best contractors on the market.  They can join your business without feeling uneasy – this will be a key selling point for businesses to attract great talent come April 2020

// Simple and manageable control over interim consultants, managed solely on deliverables and milestones and not on line management, punctuality, team input, attendance, performance reviews etc.

// I believe it will also have an impact in the quality of permanent candidates available on the market. Where companies may have had to hire on interim due to a skill gap, it’s more likely talent will be available on a permanent basis.

We have an exciting and challenging time ahead in the UK for many different reasons and just like Brexit, Global warming, it can be used to make positive changes to your business and help your organisation thrive.

But now is the time to act, partner with your agencies, make key decisions quickly and most importantly, engage your business to ensure the regulation is understood and enforced.

If you would like any further information on IR35 or discuss the provision of pay rolling contractors compliantly, please reach out, we would be happy to discuss.

We do have a conference call scheduled for mid-October which will be a discussion of the regulation, key actions to be put in place and a Q&A session.  Many of our clients and hiring community will be attending. Please reach out for more information.