Major Financial Company to Keep Hiring Contractors After IR35 Changes

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Hiring Contractors After IR35
Hiring Contractors After IR35

Hiring Contractors After IR35 Changes

A major financial company has confirmed to us that they will keep hiring contractors after IR35 changes come into place in April 2020. Also, they will only use HMRC’s CEST tool as a back-up when determining a contractor’s IR35 status. They will primarily be using a tool created by a major consultancy. Contractors will be pleased about that as the HMRC tool is widely ridiculed.

Questions on Hiring Contractors After IR35 Changes

  • What are the new IR35 tax changes?
  • How will contractors be affected by IR35 changes?
  • Who is this company hiring contractors after IR35 changes?
  • How will they help contractors stay outside IR35?
  • Will other companies keep hiring contractors after IR35 reforms?

What Are the New IR35 Tax Changes

From April 2020, contractors in the private sector will no longer decide their won IR35 statuses. This will be determined by the hiring company or engager. If the contractor is inside IR35 his or her agency will be responsible for deducting employee tax and national insurance from a contractors income. They will then pay the contractor what is left. The contractor will be called an off-payroll employee.

How Will Contractors Be Affected by IR35 Changes

If not handled properly these changes will cause havoc for companies and for the flexible workforce that contractors are part of. Indeed in a recent survey by Brookson Legal of companies affected by the changes, 59% said they are considering a blanket approach to contractors. This means, in effect, that hey won’t take on any more limited company contractors. They will consider all contracts to be inside IR35 in future.

Who is This Company Hiring Contractors After IR35 Changes

So, it is good to know one institution who is bucking the trend. So who is this forward looking financial institution? I’m afraid we cant tell you. I’d love to be able to tell you and it would be positive publicity for the company in the contracting community. However, understandably, the company does not want to put its head above the parapet. In the current intimidatory climate they would rather they got on with it in private.

How Will they Help Contractors Stay Outside IR35

I asked them if they were going to change their contracts with their contractors, and their working practices, to keep them outside IR35. They said that they don’t want to be as obvious as that for obvious reasons.

What they are going to do is to educate their hiring managers on the ins and outs of IR35.

Will Other Companies Keep Hiring Contractors After IR35 Changes

So, that’s some good news. One hopes that this will be the way forward for most companies. Already some of the major banks have capitulated and said they will no longer take on outside IR35 contractors. Lets hope that the problems that causes will force them to change their minds.

And lets hope that there will be more companies like the one we spoke to who will continue to take on outside IR35 contractors.

Timid Companies Who Make All Contractors Inside IR35 To Lose Out

 How Companies Can Help Contractors Stay Outside IR35

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