UK: IR35 in Action: What’s Next?

With IR35 reforms now in effect as of April 6, 2021, companies should set aside time to review their implementation of the reforms and ensure compliance to avoid penalties. To help companies keep track of what this change means for their business, visit AGS’ IR35 in the Private Sector resource webpage to review IR35 resources and insights from AGS subject matter experts.

Many companies have voiced concerns for the IR35 reform implementation, including the potential issues with contractors challenging their employment status. Despite a large number of contractors questioning their status leading up to the original 2020 IR35 launch date, there has not been as much movement since, which is a good sign that a surge of contractors should not leave their roles due to disputes. Data-based classification decisions are the best way to ensure compliance without feeling pressure from contractors.

Takeaway: Companies should revisit their IR35 plan within the next 12 months to ensure it is being followed and identify any adjustments that may be needed. The continuing challenge will be to capture statements of work (SOWs) and check that contractors do not move into a different channel without being recognized. For example, a contractor may move into project work that puts them at a misclassification risk. Vigilance will be key to avoiding classification conflicts as workers move to different assignments.

UK: IR35 in Action: What’s Next?

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