IR35 - Threat or Opportunity?
Posted on 27th July 2020 at 12:46
The changes to off-payroll working rules in the private sector, known as IR35, will go ahead in April 2021, shifting the responsibility for determining the tax status of a contractor from the worker to the organisation, with misinformation, lack of clarity and unaddressed issues already making waves across our industry. But do clients and contractors need to worry?
Because we work closely with organisations and contractors, we understand the concerns from both sides. However, we have always seen IR35 as an opportunity at Iridium. Typically, the way in which we engage with our clients is suited to consultancy supply, which by its nature is outside of IR35, but our service model is also fully geared-up for our consultants to operate inside, if and when required.
Our ‘IR35 friendly’ approach eliminates risk for our clients by providing bespoke solutions to every problem. Each engagement comes with a detailed statement of work, including set deliverables and outcomes, which also has the added benefit of being more cost effective for our clients, whilst optimising the quality of the consultant. We also work closely with our consultants throughout our projects, with every engagement being overseen or monitored closely by an Iridium director.
For extra peace of mind, we work with an insurance-backed tool that helps organisations successfully run their status determination with insurance-backed certification for each engagement - in other words, we have the means enable our clients to get a straight answer based on government guidelines, with the extra reassurance of protection in the event of enquiries from HMRC.
We also appreciate that some organisations will have an inside IR35 policy for non-employees. We can also effectively deliver inside IR35 consultants, which sees our contractors working for clients under an umbrella company, where all PAYE, NI and holiday pay is taken care of.
In safe hands
Inside or out, we are a very safe pair of hands in respect of IR35. We are committed to working with and educating all of our clients, and in addition to the insurance-backed tool, we continually review working practices of all of our consultants, who are handpicked by Iridium directors for each project, to ensure they are only working on the deliverables and outcomes detailed in the agreed statement of work, which covers everyone in the chain - from top to bottom.
Confusion and misinformation
In short, IR35 has unnerved many organisations and individuals in our industry, largely due to a lack of clarity, a fact that’s echoed by, Matt Lobley, one of our trusted consultants:
“I was very concerned initially about the changes being mooted. As ever the vacuum of information is filled with fear mongering and disinformation. However, when the draft legislation for the changes came out I was surprised that I felt more comfortable as a contractor with the proposed new set up.
“My main concern is further changes to the legislation leading to more confusion, and ultimately, more large companies panicking and insisting all contractors opt in - as I have a real issue with accepting a role inside IR35. The work I do is time limited, delivers specific project deliverables and is not operational in any way, in other words, the way I work is the very definition of being a consultant and not an employee, disguised or otherwise.
“I do worry the opportunities may reduce for work outside IR35. Not because previous contracts should have been inside, but more that clients thinking they are taking a low risk approach in pushing all work inside when it shouldn’t be, resulting in clients losing the flexibility they have enjoyed in the past.”
The Iridium difference
Iridium enables clients to retain that flexibility and tap into a high-quality talent pool of technology, strategy and change contractors in a way that’s different from traditional consultancies or recruitment agencies - so clients get the best of both worlds, without extortionate costs and lack of control. With every single one of our associates being experts in their respective fields, our clients receive the very best value for money, with absolutely no IR35 issues - ultimately, we are confident in the way we place people that we follow all guidance in-line with legislation.
Dominic Balfe, one of Iridium’s principal consultants concludes: “Iridium has already created good statement of work documentation, with a strong ethos of discussing specifics directly with the associates and their particular fulfilment with clients.”
Please get in touch with Ben.Dainton@ir77.co.uk to discuss IR35 or our approach.
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