It is unsurprising that the Chancellor avoided any mention of IR35 in today’s Spring Statement given the consultation announcement last week. However, given that this is such an important tax change for the private sector, today would have been an opportunity to remind businesses of this significant change and encourage them to start preparing now for its 2020 implementation. In talking to businesses up and down the country, many are still in the dark about the IR35 changes and its impact; a lack of direct reference to IR35 in the Spring Statement, won’t help matters.
This tax change will affect every medium and large-sized business in the UK that engages with contractors. It can’t be avoided.
When the tax reform was first introduced into the public sector there was a great deal of last-minute panic resulting in costly mistakes and an exodus of contractor talent. If private sector businesses are to avoid this talent drain, they need to start talking to and reassuring their contractor workforces, undertake fair employment status assessments and put the right plans and procedures in place. In today’s economic climate with ongoing uncertainty and change, putting your house in order early will mean the difference between IR35 just being a small bump in the road that you can effectively manage, or one that could have mountainous long-term consequences.