Making blanket assessments on IR35 will set you up for bigger problems down the line. It’s a big mistake. Here’s why you shouldn’t do it.
Everyone’s talking about IR35 – how we tax contractors – and the big changes that are coming in April. We’ll see the final legislation in mid-March so that leaves a hair-raisingly short amount of time to prepare before the 6 April deadline. That’s just one of the reasons why we think IR35 must be delayed for a proper review.
Given the situation is as clear as mud, some businesses are being tempted by the idea of making ‘blanket assessments’. They are deciding to put all their contractors into one category, either outside IR35 or inside, meaning they’ll be treated like employees for tax purposes. That’s regardless of the role the contractor is actually doing. Badging all contractors the same might seem like a quick fix, but in reality it only stores up bigger problems for the future.
Making blanket assessments is a big mistake for client businesses and we think it’s bad for contractors too. Here’s why:
There’s a moral to this story. Just because the government hasn’t thought through IR35 properly doesn’t mean you should follow their example. Just like two wrongs not making a right, a slap dash approach to an already messy and flawed tax reform is only setting us up for trouble.
So our message to clients in the Good Recruitment Collective, the 500 businesses that work with the REC is, generally, don’t go down the route of blanket assessments because in the long-run that’s going to be more problematic than taking the time now to get in right.