Question Submission Date: April 2020
Full Question: I have been placed inside IR35 by my client, which I had intended to appeal. However, do I need to do this now, given reform will not be enforced until 2021?
IR35 has always been the elephant in the room of every conversation. It’s one subject that if understood correctly will give everyone involved little headache at all. Based on this scenario, we would advise to speak directly to the end client or recruiter. The onus on determining the contracts IR35 status has been amended so that responsibility remains back with you, the contractor, until April 2021. If indeed you feel the contract has been unfairly placed inside IR35, you have every right to provide amendments to the contract and challenge it directly with the end client.
The IR35 rules and clauses – substitution, obligation and control – are still applicable regardless as to whose responsibility it is on determining them. To be confident that the contract is genuinely outside of IR35, it is necessary to ensure that the day-to-day, practical working arrangements under which the services are supplied, also remain outside of IR35.
Contracts already agreed, from our knowledge, can not be altered, however in this case no signatures were made and confirmed so you have every right to challenge the status. Perhaps this would be the good time to look at getting an IR35 review from an expert in this field.
IR35 has always been met with much trepidation, and at a time with so much change, I’m glad the government are delaying a legislation that could have seen so many opportunities lost for contractors. Whilst this change in direction is great news, I can appreciate so many have already pleaded their case and taken on new contracts inside IR35 or indeed have looked for contracts elsewhere.
However, many end clients are now making a U-turn and reconsidering their stance on IR35 due to the introduction of Covid 19 (coronavirus). Many could argue, are the end clients opening themselves up to tax investigations? Why did they not offer roles outside IR35 at the beginning, and not blanket assess, as we have seen in some cases?
In our professional opinion, this delay will relieve the peer pressure felt by most agencies and end clients. It will allow them more time to understand IR35, implementing clearer processes and teams in place. We hope this delay will allow more consideration to be given when determining a contracts IR35 status and show what talent can be secured by fully understanding IR35 more clearly.