IR35 - The promise of a "silver bullet
It seems a short time ago that the off-payroll community and organisations who rely on it breathed a collective sigh of relief when the government announced the deferral of 2020s proposed IR35 legislation.
Twelve months later, we anticipate that from April 2021 onward, there will be a complete overhaul of the use of 3rd party contractors and the delivery of such services.
How should organisations equip themselves?
The associated administrative workload, fear of financial penalties, loss of project resources and general risk exposure means that on both sides of labour supply & demand, there is currently a flood of questions around how organisations should equip themselves to compete for the best project resource without the risk of penalty.
Where there are questions, there are naturally answers – and currently, the Talent / Services sector is flooded with propositions that suggest the ‘Silver Bullet’: Insurance Shields, Proprietary Determinations tools, Process audits, etc. Amongst other offerings, all purport to remove any risk and assure a safe path forward.
No ‘Silver Bullet’
We’ve been evaluating the impact of IR35 since it was first muted back in 1999 by then Chancellor Gordon Brown and examining its impact since it was rolled out in the public sector in 2017. As a business whose success hinges on the supply of contracted resources, we’ve immersed ourselves in the subject, and the firm conclusion we have come to is that there is no ‘Silver Bullet’.
What is the legislation?
Taken in it’s purest form, the legislation is intended to expose ‘disguised employees’ (and associated tax revenue loss). The solution is NOT to hide them better. The answer is to invest time to understand your resourcing model and look at the processes and the optimum efficiencies generated by balancing employee utilisation against 3rd party outsourcing and contractor engagement. Only in understanding this and implementing the correct procedures, along with identifying the right partners, can an organisation successfully navigate through the challenges ahead.
How we can help
Saragossa offers advice and support to our community as IR35 approaches; however, rather than volunteering a packaged solution, we offer our ears instead.
We’d like to understand how current processes work, provide advice regarding risk exposure and management, and then help create a strategy that fits.
We aim to benefit by supporting project resourcing the other side of IR35, building relationships to increase our client portfolio, and creating meaningful long-term partnerships.