IR35 delay: specialist insurer responds

Following yesterday’s announcement that controversial IR35 tax reforms will be pushed back a year in response to the global Coronavirus pandemic, specialist insurance broker, Kingsbridge, has urged recruiters and employers not to halt plans to prepare for incoming reforms.

Chief Treasury Secretary, Steve Barclay, confirmed that implementation will now be postponed until April 2021 less than a week after the controversial measures were confirmed in the Budget as part of a broad package of measures the Treasury has introduced to protect the economy from the Covid-19 outbreak.

On the U-turn, Nicola Hayman, Legal Manager at Kingsbridge, commented:

“There is no doubt that employers and recruiters across the UK will be heaving a huge sigh of relief that changes to off-payroll working rules have been delayed. Aside from the fact that the global Coronavirus pandemic is putting unprecedented and immediate pressure on many British businesses, anecdotal evidence suggests that many were already ill-prepared to manage the planned IR35 reforms.

“However, while this U-turn certainly offers some breathing space to the contractor market, it is vital that recruiters and end-clients don’t squander this unexpected opportunity as when the reforms do kick in, HMRC is unlikely to offer the soft landing that had previously been promised this year.

“There is a significant opportunity for recruiters to use this extra time to properly educate their end-clients and work with them to develop a clear path to a solution that maximises their ability to retain their contingent workforce outside IR35 and minimise their costs, rather than adopting the panic measures that some were being forced into

“Indeed our expectation is that the best recruiters will be those that continue to implement and embed their new IR35 compliant processes with clients as if the reform was coming in now. This will give them a real long term competitive advantage with end-clients versus those who don’t take action now and leave their clients scrambling in twelve months’ time.

“Kingsbridge remains uniquely positioned to help recruiters and end clients with our combination of automated assessment tool, human review and insurance solution.

“Even when using HMRC’s own calculations, the vast majority of PSC contractors are genuinely self-employed – but processes must be put in place to ensure this talent pool can be used in a compliant way, backed by insurance for extra peace of mind. Now, more than ever, businesses will need to rely on flexible workforces to adapt to demand in an uncertain market – and April 2021 will be here before we know it.”

- Ends

Vickie Collinge
BlueSky PR
T: +44 (0)1582 790 705
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