IR35 delay leads to blanket ban U-turn

The delay to the private sector IR35 roll-out has encouraged more employers to ‘get it right this time around’, with staffing companies reporting that over a third of hirers (35%) were making a U-turn on non-PSC decisions

The extension has encouraged more employers to move away from HMRC’s widely criticised determination tool (CEST). While 31% of respondents revealed they were using it in the run-up to April 2020, just 18% are planning to use it this time round, according to a recent study of recruitment business carried out by Kingsbridge Contractor Insurance

Respondents further reported that the extension had provided more time to better protect the entire recruitment chain, with 71% of participants indicating that they would now only use a tool that’s backed up by insurance.

A further 79% of those surveyed cited having a policy in place that covers the end-client as a high priority, an encouraging statistic for employers as they prepare for the extended deadline in an uncertain economy.

Thomas Wynne, managing director, Kingsbridge Group, said: ‘It’s hugely encouraging to see so many employers reversing the blanket bans that were originally imposed, and we hope that more follow suit as organisations begin working with staffing companies to prepare and truly get it right this time around.

‘With contingent labour likely to play an even bigger role in the UK economy over the coming few years as companies seek flexible resources in an uncertain market, it is more critical than ever that robust processes are in place that allow talent to be engaged in a compliant way and put in place relevant insurance cover to mitigate these new risks.’

Ann Swain, CEO of the Association of Professional Staffing Companies (APSCo), who provided the survey forward, added: ‘While the government has delayed the rollout until next year to avoid economic disruption during the Covid crisis, we believe that this is simply delaying severe disruption to the self employed workforce and is likely to further damage an already fragile economy.

‘Given that Covid-19 has dramatically changed the economic landscape, many politicians continue to call for the changes to be scrapped in favour of legislating change to employment status as recommended by the Taylor Review.

‘However, at the time of writing, the roll out into the private sector will happen as planned, though APSCo will continue to lobby the government to review the employment and tax status of independent contractors to ensure it is fit for purpose in today’s economy.’

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