Our reactions to Draft Finance Bill Rules for off-payroll working from April 2020

Matt Fryer, Group Compliance Director of Brookson Legal, comments on the government’s draft legislation for the 2019/20 Finance Bill:

“This draft legislation confirms that the proposed reform of IR35 is happening in April 2020 and that businesses need to take action now to avoid a significant impact on their business performance and their talent pool.

“HMRC appears to be taking a naïve view that there will be no impact on the wider economy, but this is only on the basis that all hirers assess their contractors correctly by April 2020. Our Ticking Timebomb research sends a warning signal that they won’t – 45% have not yet addressed the issue and 59% are considering taking a blanket approach to all contractors.

“Hundreds of thousands of contractors are worried that this will lead hirers to reduce the number of contractors that they use. Contractors may also leave businesses who do not manage IR35 well. On the plus side, the law change does make hirers accountable to their contractors. Genuine contractors who engage with the businesses that they work for should be able to ensure that they retain their flexible status.

“Our advice to businesses is to act now, and not wait for the Autumn Budget. In doing so firms can avoid making ill-judged, last-minute decisions, like implementing a blanket ban on contractors – a mistake which led to a loss of talent from public sector when the legislation was first introduced in 2017. As we’ve seen recently with TFL and HS2, this could have significant impacts on industries that rely on a highly skilled, flexible workforce, such as construction, engineering and IT.”