IR35 reforms now live in the private sector.
April 6th sees introduction of controversial “Off-Payroll” legislation.
This week has seen the introduction of private sector IR35 reform, so that the responsibility for determining a contractor’s status for tax purposes has shifted away from the contractor themselves to the hiring company, if that company is a medium or large business.
Small companies are not covered by the legislation, meaning that contractors engaged by small companies can continue to determine their own status for tax purposes.
Under the legislation, medium & large hiring businesses have to provide the contractor with a Status Determination Statement, indicating if the assignment has been found inside or outside IR35.
Many commentators have expressed dismay that the implementation has gone ahead in the wake of Brexit and the Covid Pandemic, with all the resulting disruption caused by those events, and the medium and longer term effects of the legislation on the contracting sector remain largely unknown.
The view of Outside Spy, and others, is that the underlying demand by companies for flexible and skilled workers remains undiminished, and the appetite among workers for a contracting lifestyle remains strong. Whilst it is likely that models of engagement may undergo changes, contracting itself is resilient enough to withstand these changes, as it has on previous occasions.
We will be providing the first indications of the effects of the legislation on contract numbers, once we have at least 3 months of contract data to report on, which will be later in the summer.
Outside Spy will continue to discover all the available IT contracts that are advertised as being “outside Ir35”, wherever and however they are advertised, so that IT Contractors can be in the best possible position to land an Outside IR35 assignment, and so retain the advantages of operating via their own limited company if that is what they desire.