NEWS

​A recent survey we held at Marine Resources found that only 30% of the marine industry are aware/prepared for the fast approaching IR35 changes, which is concerning.

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It would be a naïve assumption that all contractors ‘fall in line’ to either move to a permanent status with the end client, or join a PAYE umbrella company. I suspect that we will begin to see many other solutions being offered, along with a lot of noise and confusion for everyone who isn’t ready and aware of their status and implications. The reality is that contractors earnings and lifestyle will be impacted heavily and so the IR35 deserves attention to ensure compliance.

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This leads us to believe that there will be 4 clear options for navigating through this with a workforce that includes contractors:

1. Project work - This is for the outcome orientated projects where the end result is all that matters.

2. Permanent employment – Perhaps now is the time for contractors to consider a permanent role. The stability and the added benefits of a regular income and employer pension contributions, make this an attractive option for some. Would a more stable workforce benefit the business?

3. Umbrella solution – If the contractors are under supervision, direction and control, and are operating inside IR35 then this option may be the alternative to a permanent employed status. I would suggest choosing an umbrella company wisely. Do your research! Is the company fully compliant? Are they audited by an independent third party like the FCSA? Have they been reviewed by the HMRC?

4. Contractors will still exist - If they have no supervision, direction or control and the rule of substitution applies. Also if the end client has taken ‘reasonable care’ and has assessed the role as outside of IR35 then they can continue on as they were.

 Important elements to consider:

• Don’t leave this too late, April is imminent! Talk to an expert about your plans, now.

• Communication is key. Talk to your recruitment partner, talk to your supply chain. Be proactive and tackle this head on.

• Is the chosen assessment tool fit for purpose for the business. Is it insured?

• Are your recruitment partners genuine IR35 experts? Work with a specialist!

In conclusion, we can expect an element of chaos and uncertainty that comes with any major change. Some solutions may seem attractive in the short term, however this will soon turn out not to be the right option. Some contractors may risk working with a non-compliant solution and ultimately will be held responsible.

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Contractors will feel the pinch and start to base their decisions based on net pay and I wouldn’t be surprised if we start to see an increase on the rates requested by as much as 20%-30%, especially if their skill set is in demand.

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There will undoubtedly be a cost to the market at every level. We predict an initial push back, however the reality is that if the skill set is essential to the success of your business goals, it is something to consider for the long term achievement.

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It would only take one business to make the first move by uplifting their rate and it would be interesting to see the impact of this and if a trend emerges.   

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The right solution for each business is individual and requires a lot of internal discussion and a consultative approach from recruitment partners. Ultimately the message is, be prepared, be flexible and have a supply chain you can trust to support you in a compliant manner.

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For any further information please don't hesitate to call Hollie Smith on 07810 473837