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Off-Payroll working (IR35) – Is it Groundhog Day!

17/02/21 Peter Livingstone Director of Contract & Interim

With April looming, Peter Livingstone, Director of Contracts & Interim provides some insight into the world of off-payroll working (IR35).

One of my favourite films has Bill Murray visiting the home of Punxsutawney Phil, the Groundhog who predicts six more weeks of winter or an early spring! We could do with that now as early 2021 feels very much like February 2020 when it comes to off-payroll working (IR35) in the private sector,  and I just want someone to categorically state this is happening…...or not! Back in 2020 I was adamant we would not be pushing ahead and right here right now I feel almost the same. 

After the first national lockdown, the Chancellor decided to delay the IR35 reforms in the private sector. This decision was welcomed by many commentators, the House of Lords, leading business bodies including the REC. However, as we approach the new implementation date (6 April), there is an even bigger argument to be made for delaying the reforms once again. The pandemic has had an enormous impact on the labour market especially temporary and professional contracting assignments.

I’m now of the opinion let’s just move forwards and emphatically declare that the off-payroll rules for the private sector will indeed by taking place in April 2021 after all it’s going to happen so let’s all just get on with it. Like many recruitment businesses, Redline has invested a huge amount of time and energy developing the systems, tools, and processes to implement. We have a fantastic Insurable Status Determination Tool, our freshly prepared REC 2021 contracts are ready to go, we could not be more prepared to support and advise our customers and the consultancies we work with.

The question is, are businesses truly in a position to respond to our requirements of them which are soon to be their requirements? I believe many businesses have had one or two other things to contend with over the last year. However, it could be that approaches have now changed, they have had to change in the COVID-19 environment! Before the global pandemic, it would be fair to say that most UK businesses had a very different approach to people working from home. Now, not only are employees working from home effectively but so are many Consultancies. This has a huge impact on how many businesses will have to answer those all-important status determination questions relating to how work can be completed. Let alone the very obvious response to the location of work. So, if not by design an alternative thought process to how businesses can work with consultancies has already started to take place.

I said the following almost 12 months ago and I still stand by it, with some additions.

We believe the contract and interim market will remain strong thanks to the huge demand for niche contracting skills, a desire for digital transformation and the flexible opportunities on offer in the UK. Talent is what drives a business forward, and contingent workers are a key part of the mix, it’s worth noting that contractors add significant value to the economy, along with adding invaluable expertise to businesses which require specialist input to complete projects. As we move towards April 2020 and businesses gear up for legislative changes which may affect them, IR35 should be a key consideration otherwise they risk being at a disadvantage if unprepared.

Perhaps in the coming weeks, we will all be a little clearer as to the Government’s plans, speculation is growing there will be an announcement in the Spring Budget on 3rd March 2021, but whatever happens we are all a lot wiser as to what really matters! Things change and we all adapt!

For more information visit our IR35 Hub or contact Redline at ir35@redlinegroup.com to receive further updates on our i) New Contracts to reflect IR35 changes, ii) Our Insurable Status Determination Tool, iii) Legal guides and fact sheets.