With April fast approaching, it’s time to get a plan in place to ensure your organisation is ready for IR35. In a guest column on Business Leader, our COO, Kevin Corne breaks down how businesses can prepare for IR35. Read the full feature below…
To date, there has been a lot of noise around IR35, with the majority of which being negative. Larger corporations such as Royal Bank of Scotland, Lloyds and Barclays have flooded the market with blanket approaches, getting rid of all freelancers.
That’s the issue with taxation changes; many businesses make knee-jerk reactions to quickly resolve them. They are looking at IR35 with a transactional lens and not taking into consideration its transformational capability it presents. However, if they took some time to really assess the impact, it has the potential to open up doors and opportunities for businesses and their contractors.
This is why we decided to look into how the wider business community feels about IR35 and flip the current story on its head with our new report ‘Change is Good’.
After speaking to 500 decision-makers, we were shocked to learn that 71% were unaware of the date that it comes into effect (April 6, 2020). Digging deeper, we wanted to understand exactly where the problem sat. More than half also told us they haven’t received enough information, while 52% claimed it is contradictory or confusing.
In response, less than four in ten firms said they’ll have a robust strategy in place by the time IR35 changes kick in. Meaning almost three-quarters of businesses run the risk of not being ready on time. This is why businesses need to start preparing now. They need to have a clear and published policy around contractors and a new operating model to acquire capability post-April 2020. Without a clear and responsible direction, the risk of talent loss and programme disruption is very high.
With 47% hoping IR35 would bring an opportunity to review and improve their business, we also decided to uncover some of the positive outcomes that IR35 can present.
- Take a step back – it’s easy to lose sight of why your workforce is shaped as it is, so IR35 is the best excuse to take stock of your current situation and the value it’s delivering. Ask yourself, can you really share that ROI back to the business and demonstrate success on time?
- Change your model – now is the time to design your operating model so your business has the right talent and resources in place to be fit for the future. In reviewing the existing employment strategy, businesses will be able to identify many areas that can be improved and accelerate results
- Bring your customer front of mind – IR35 is a business issue, but we’re all consumers. If you keep the customer in mind when reviewing and developing your operating model, it leads to longer, more loyal relationships. This, in turn, increases revenue and profit over time. So taking an inside-out approach to building a team that will delight the customer is a win-win for everyone
For contractors, it will allow them to embrace the best aspects of the gig economy; the ability to share their vast experience on multiple projects and the opportunity to earn more as it may spell the end of the day rate. Also, more satisfaction in what they do as they will be measured against deliverable outcomes, rather than a timesheet.
It’s clear that if prepared correctly, IR35 presents an opportunity to revolutionise operating models that future-proof firms, give freelance experts the recognition they deserve and change business for the better.