When the alarm clock goes off, you have a choice to make. Snooze? More than once? Or just hit off and jump out of the bed? You might feel a bit groggy at first but before you know it, you’ll be out of the shower and drinking that first coffee of the day, ready for anything.
Right now a loud alarm clock is ringing on the bedside lockers of companies where freelance contractors are part of the workforce. The publication of the draft Finance Bill in July confirmed that off-payroll working in the private sector will come into force from April 2020. As predicted, it follows a similar approach used in public sector contracting in 2017. Equally predictably, it’s being greeted with trepidation.
The question now is which companies are going to hit the snooze button and delay their response to the alarm. Talking about adapting to the new rules could take up months of valuable time. Getting out of the bed and into the shower requires a completely different mindset.
Over the last year I have been working with a number of international companies whose leaders decided to get ahead of the game. One in particular had a population of about 400 contractors in its contingent workforce program, so the company realized that the new rules would have a major impact on their business. Instead of waiting for the law to be enacted, they decided to take a pro-active step.
Bringing an outside company in to do the IR35 employment status assessments can make all the difference. Contractors resisted the changes at first, reluctant to have taxes deducted at source and fearing the new regime would cost them too much in the long run. This could have cost the company the services of valued niche contractors if the transition had not been handled properly.
PREMIUM CONTENT: Guide to Implementing IR35 Off-Payroll Working Rules
As it turned out, the resistance evaporated. Within a few weeks, both the company leadership team and the contractors accepted that they were now operating best practice and that this was the approach they wanted to continue to take going forward. They are already prepared for the changes in April 2020.
Having the program up and running means that all the heavy lifting has been done. The program is set up and working well. They are currently working to identify any hidden contractors which have not yet been brought on board, and these can be transferred to the program in plenty of time for the spring deadline.
I would encourage companies concerned about the new IR35 rules not to snooze. Rather, hit the ‘off’ button on the alarm clock, jump out of bed and head straight for the shower. Get the right help and continue to use contractors within the confines of the legislation. And you’ll enjoy that coffee all the more.
