IR35 RE: CHANGE IS GOOD

Orange Papers
25.07.20

IF PREPARED CORRECTLY, NEARLY HALF OF UK BUSINESSES SEE IR35 AS AN OPPORTUNITY

Sullivan & Stanley uncovers new insights from 500 business decision makers on the updated IR35 legislation.

 

  • 71% of respondents were unaware that the IR35 changes come into effect on 6 April 2020
  • Less than four in ten firms (38%) said they’ll have a robust strategy in place by the time IR35 changes kick in
  • Despite a lack of preparation and confusion, 47% hoped it would bring an opportunity to review and improve systems and clarity around the workforce composition

LONDON, 20 NOVEMBER 2019: A report by Sullivan & Stanley today reveals that businesses are unprepared for the updated government legislation, IR35, with less than four in ten (38%) having a robust strategy in place. In response, almost three-quarters of businesses run the risk of not being ready on time – and that’s a concern.

Of the 500 business decision makers surveyed, a fifth stated they expected to be ready up to three months after IR35 is enforced (6 April 2020); 32% said four to six months after the change date; and nearly one in 10 (9%) think it will take them seven to 11 months beyond April to be up to speed.

The problem seems to lie with confusion and lack of education – a surprising 71% were unaware of the date that it will come into effect. While more than half (54%) saying they haven’t received enough information and 52% claiming it is contradictory or confusing.

Ensuring businesses have the right advice and support to make successful changes in time is vital. With 47% of respondents hoping IR35 would bring an opportunity to review and improve systems, Sullivan & Stanley’s new report turns the current story on its head and uncovers the positive impact that IR35 can present for businesses and contractors.

Businesses

  1. Take a step back – in the cut and thrust of everyday business operations, it’s easy to lose sight of why your workforce is shaped as it is. IR35 is the best excuse available to stop and take stock of your current situation and the value its delivering
  2. Improve capability – 33% said their business would consider converting contractors into full-time employees. That’s fine, but it’s vital to review the roles they’ve been fulfilling. Lots of high-profile projects have run over on time and budget because the right management mechanism wasn’t in place to deliver the correct outcome. IR35 brings an opportunity to change this
  3. Change your model – more than half (54%) of respondents were committed to changing their commercial model due to IR35. So, now is the time to reshape 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
  4. Bring your customer front of mind – IR35 is a business issue, but we’re all consumers. If you keep the customer in mind at all times 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
  5. Call in the experts – IR35 creates an opportunity to bring in experts who know the facts, can bring people together, co-creating an operating model that quickly drives through transformation at a lower cost and with a better outcome. Some 53% of respondents said they already intend to seek expert help

Contractors

  1. The best aspects of the gig economy – businesses will want to work with the best gig economy experts who can share their vast skills and experience on multiple projects, driving the right outcomes for the company and the wider UK economy
  2. Be measured against deliverable outcomes – rather than just having a timesheet signed off (if at all), there will be increasing personal satisfaction and respect from the organisation and industry at large
  3. The ability to earn more – this may spell the end of the day rate, as companies agree to a specific budget for a project. That also means a defined timeline, which could help contractors complete it and move on to new work more quickly

Kevin Corne, COO at Sullivan & Stanley, said: “With only four months to go, we at Sullivan & Stanley want to help businesses and contractors alike, to better understand the updated IR35 legislation so that everyone is ready when it comes into effect on 6 April 2020.

“A lot of businesses are looking at IR35 with a transactional lens and not taking into consideration its transformational capability. We believe that IR35, if prepared correctly, presents an opportunity to revolutionise operating models that future-proof firms, give freelance experts the recognition they deserve and change business for the better.”

Sullivan & Stanley is a business transformation consultancy that brings together the best minds, to solve the world’s most complex business problems. Through building small teams from its elite network of the top 5% experts, Sullivan & Stanley tackles any business requirement to deliver sustainable change. What sets Sullivan & Stanley apart is its ability to deliver value to its clients every 90-day.

READ THE REPORT HERE

Kevin col circle down
Written by Kevin Corne