There’s no doubt that we’re in a sea of change, with the impending IR35 reforms across the private sector.
Any change this significant is likely to ripple through an organisation, affecting its processes and certainly its approach to recruitment. Come April 6th, many of our clients will have to follow the new, off-payroll rules – our job is to make sure they’re prepared by assessing the changes and potential impact on their business.
Drawing on public sector expertise
We’re at a unique advantage at Talent in that we have a well-developed, in-house public services department which has continued to build specialist contract teams across the public sector since the IR35 changes of 2017. We’ve been able to leverage this experience and consult with external advisers and, in turn, present our private sector clients with a variety of innovative, tailored solutions to challenges the reforms may pose.
The fact that we have this in-house team has also allowed us to consult on IR35 issues with clients and contractors from an early stage. We’ve been engaging clients on the topic for the past year, albeit with some gentle persuasion from our IR35 experts.
Consulting clients early on has helped ensure they retain essential and expert contractor knowledge, while remaining compliant. By talking through things like the CEST tool, public sector case studies, contractual wording, business requirements, culture and future growth plans, we’ve been able to present several potential options for beyond the ‘cliff edge’ of March 31st. Options we’ve been applying for some time using the Statement of Work model.
Not all doom and gloom
Every cloud has a silver lining. I’m certain the IR35 reforms will present more opportunities than challenges once the dust settles.
For example, the potential of working towards deliverables sets expectations and means work is more accountable and pre-defined by employers, creating that extra level of transparency for contractors. Meanwhile, clients can prepare for potential fallouts based on IR35 decisions by transferring and retaining knowledge in a fully documented fashion moving forward, as they have done in the last 12 months.
There’s also an opportunity for less risk-averse companies to attract top talent – people who may have worked in a market-leading firm that’s decided to adopt a blanket inside approach, but who want to work outside IR35.
It’s also important to note that the reform won’t impact all businesses. There are certain criteria for clients – specifically, they must meet two or more of the following conditions:
- Have an annual turnover of over £10.2 million
- Have a balance sheet total of over £5.1 million
- Have more than 50 employees
The smaller companies and start-ups that don’t meet these criteria stand to gain from the new law. This will mean adopting a slightly different mindset of trusting the engaged limited companies to do work set by deliverables, with some small measures to ensure compliance. So, not too dissimilar to how consultancies work now, only with an arguably lower costs and more robust levels of control.
The benefits of an external audit
So, where does your company stand? If you’re not too sure, an external audit can help.
An external audit is essentially a health check for your business. Talent’s aptly named Healthcheck is our discovery service that provides audits on things like risk, governance, processes and systems, on top of a contractor management service.
We’ll assess numerous areas including: if you’re retaining the knowledge you’re paying for; if you have contractors in roles more suited to permanent placements; if and how we can transfer your business to permanent teams more efficiently; and if your set deliverables are being met by your existing suppliers/consultancies.
Our role is to essentially embed ourselves within your company, helping you to cut costs, streamline processes and make smarter recruiting decisions, all while remaining IR35 compliant and avoiding bad press or penalties.
With our help, more and more companies and contractors are starting to feel IR35 ready. Do you?