Approximately half of the UK’s businesses aren’t prepared for changes to IR35 legislation, which will come into force this April.
Research from the Association of Professional Staffing Companies (APSCo), the recruitment trade body, has shown that there are many organisations who are not ready for the changes to off-payroll working rules for those in the private sector.
Originally introduced in April 2017, IR35 legislation is to be extended to medium and large private sector organisations, so that businesses who use the services of independent workers will be responsible for setting the tax status of those individuals.
Liability for tax will transfer from the contractor to the fee-paying party, so employers will be responsible as of April 2020.
However, APSCo surveyed its membership and the results were worrying; 79% of recruitment firms said that although the businesses they work with are aware of impending changes to IR35 legislation, just over half of these organisations are actively preparing for the changes.
It is a huge improvement from the 12% of July 2019 but, in short, many businesses clearly are not doing enough to prepare for the coming changes.
Tania Bowers, General Counsel at APSCo, said: “The countdown to the off-payroll working reform is now well and truly underway – but our latest data suggests that many employers are either unaware of the wider potential consequences of the changes, or simply burying their heads in the sand.
“Companies which haven’t already must urgently review their existing contingent workforces to determine what employment models individuals are working through to understand the extent of PSC contractor usage.”
Since the results of this survey were announced, the government has confirmed that a review is being launched into the implementation of the changes, which aims to address concerns of businesses and individuals.
The hope is that if further steps are required to guarantee successful implementation of reforms, the review will identify them.