UK Government's new guidance for IR35 'falls woefully short'

The Association of Independent Professionals and the Self-Employed (IPSE) believes the Government’s new guidance on the changes to IR35 “falls woefully short”.

Andy Chamberlain, deputy director of policy at IPSE thinks that the guidance offered is far from helpful. He explains how it does not “acknowledge how incredibly difficult it is to make accurate IR35 determinations.”

HRreview’s live poll asked ‘Do you think IR35 will have a positive impact on your recruitment strategy?’ With just under half (44 per cent) saying they feel it will have a negative impact.

A fifth (20 per cent) of individuals who voted in the HRreview poll said they feel neutral towards IR35’s impact and 16 per cent saying they feel slightly positive towards it.

Mr Chamberlain said:

In the guidance it states that clients must take ‘reasonable care’, but then offers no guidance at all on what ‘reasonable care’ actually means. When the guidance declares that clients must decide the ‘employment status’ of workers, it also fails to mention whether that means they should consider employment rights such as holiday pay, sick pay and defence against unfair dismissal.

That is no small omission when there is such confusion about employment status in this country. The guidance for agencies also falls far short of the mark. It does not even begin to consider who should shoulder the burden of Employers’ National Insurance liability. This has been a major cause of dispute and disruption in the public sector where, in some cases, it has effectively been deducted from the contractor and in others it hasn’t. This needs to be clarified.

IPSE believes extending the public sector IR35 changes to the private sector will be deeply damaging. Not only to contractors, but to the large companies which engage them and the economy as a whole.

From 6th April 2020, private sector companies will have to check if their contractors need to pay income tax and national insurance.  This will place the responsibility of categorising contractors on the company, which means private sector companies will have to check if their contractors need to pay income tax and national insurance.

IR35 being implemented in the public sector has changed the title of a large amount of people from self-employed to employees, which significantly adds pressure on to HR professionals. Due to the fact they have to make clear the new rules to managers and staff.

You can view the two links of the Government’s guidance here.

At time of press 50 people have voted in the HRreview poll.