We’re still fighting against IR35, but contractors should prepare for April 2020 changes
- 23 Oct 2019
Unless you’ve been living under a rock for the past couple of years, you’ll know the government is planning to make calamitous changes to IR35 in the private sector. Those changes are already having disastrous consequences in the financial sector and will inevitably result in genuine contractors paying tax as if they are employees, but with no employment rights. IPSE continues to lobby hard against this appalling legislation, but there are practical steps contractors should be taking at the same time.
First, if your current contract extends beyond April 2020, get it independently reviewed. IPSE has a contract review service and other suppliers are also available. Second, think very carefully about your working practices. If things look and feel a bit employment-like, steps should be taken to make the arrangement more business-to-business. Have a look at IPSE’s recent advice to clients on how to ensure engagements don’t fall foul of the IR35 rules.
Finally, contractors should look closely at what IPSE partners, Hudson Freelance, are offering. They’ve designed IR35-compliant contracts and will independently audit engagements. In the event of a challenge from HMRC, Hudson Freelance provides and pays for the legal team to argue the case and is liable for fines and awards. Essentially, their product de-risks the client and therefore removes the inbuilt incentive to apply IR35. We think this offering could protect genuine freelancers from the worst effects of the legislation, which is why we’re delighted to be partnering with them.
The turmoil in Parliament could yet prevent the legislation getting passed, so we certainly haven’t given up hope, and we’re asking for your help by writing to your MP. In the meantime, it is prudent to begin to prepare for the worst. The truth is, this might happen and it might not: IPSE’s advice is to start thinking about how this might affect you and take any steps you can to reduce the risk. The checklist above is a good place to start.
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