A year after UK chancellor Rishi Sunak delayed controversial IR35 reforms for the private sector, they are set to be introduced in April. But is the C-suite ready for this extra burden?
The change puts the onus on medium and large-sized companies to assess whether work done by contractors, and how they carry it out, classes them as employees. If it does, this would move them to PAYE, paying the same income tax and national insurance as the rest of the employed workforce and potentially having benefits such as holiday or sick pay and a pension.
Many claim IR35 will damage the consultancy economy, leading to a brain drain overseas. Its supporters cite illogical differences in the tax take from employees when the working environment and rules contractors must adhere to are often the same.