Along with the time, energy and cost of the government rolling out the reform, businesses have spent vast amounts of money on this exercise. You cannot ignore this, no matter how welcome the news is that IR35 reform will be thrown on the scrap heap.
So what now for contractors and the future of IR35?
Well, from April 2023, contractors will once again be tasked with ensuring their IR35 compliance. Along with this, it means the systemic issues resulting from IR35 reform – such as contractor bans and non-compliant blanket IR35 determinations – should no longer exist.
In theory, and after a rigorous assessment of their IR35 status, genuinely self-employed contractors will be able to operate outside IR35 without any difficulty going forward. They will, however, be the focus of IR35 investigations once again.
When the changes take effect, businesses meanwhile can engage contractors in this manner without fearing being investigated by HMRC for non-compliance.
Standing back, and to conclude, the latest twist in the tale of IR35 is one that should remove a major barrier that has held back the true potential of the UK’s flexible workforce.
Although, and to reiterate, it does beg the question – why didn’t the government listen the first time around?
Seb Maley is chief executive of Qdos
