IR35


It’s been more than two months since the introduction of reforms to the IR35 rules and in that time, thousands of contractors have required contractual assessment and review. 

JSA Group’s assessment platform, IR35 Complete™, has been used to assess contractors with over 750 hiring organisations across numerous industry sectors since the reforms were implemented.  Naturally, this scale of deployment leads to a healthy data set, offering interesting insight about what’s happening in the marketplace.

To date, 18.9% of the off-payroll status determination assessments carried out through IR35 Complete™ have identified that the hiring organisation is in fact not responsible for producing an assessment due to them qualifying for the “small company exemption”. In such scenarios, the IR35 assessment responsibility continues to sit with the worker themselves. The IR35 Complete™ assessment process specifically screens hiring organisations based on their size to ensure that supply chains don’t become polluted with invalid Status Determination Statements produced by exempted hirers.

“Inside” IR35 determinations account for just 28.2% of determinations made. This is interesting because of pre-April concerns that many more contractors were going to be officially classified as “inside” IR35. Of course, there is still some application of blanket “inside” IR35 decisions which isn’t reflected in this figure, but we believe this statistic speaks volumes about the value of carrying out genuine assessments. When roles are properly assessed, instances of “inside” IR35 are much less common, indicating the unfairness of large-scale blanket “inside” IR35 determinations.

“Outside” IR35 determinations show up in 52.8% of cases. When we consider that in practice this number can most likely be combined with the 18.9% of cases where the worker remains responsible for their own IR35 determination, that effectively means that in nearly three quarters of cases, there is no change of IR35 status disruption injected into the supply chain; it’s effectively “business as usual”.

All of this underlines the need for quality, timely and accurate IR35 assessments.

 

Article originally posted on theglobalrecruiter.com, August 2021

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