With a backdrop of Brexit and an ongoing skills shortage, there is a potential for the changes to make a bad situation worse. While many companies are struggling to attract the required skills for major digital transformation projects, the changes to IR35 could possibly drive off-payroll workers to seek employment abroad where the same skills are in high demand.

A recent survey carried out by the Association of Professional Staffing Companies (APSCo) reported that 79 percent of the professional recruitment firms polled believe that most of the businesses they work with are aware of the incoming changes. Meanwhile, 51 percent said the majority of their clients are actively preparing for the updated legislation (Executive Grapevine).

I’ve written previously about how companices are beginning to change their policies in light of IR35. There are a number of options available to contractors, from converting to a PAYE worker to remaining outside of IR35, and others. There is middle ground in the majority of circumstances, and the key to success is finding it.

A quick reminder:

The new rules make companies responsible for assessing whether a contractor should be considered a full-time employee in the eyes of HMRC, bringing them in-line with the public sector. Previously, it was up to the worker’s personal service company (PSC).

From April 6th, the party which pays the contractor will be required to operate PAYE or NICs as appropriate, making the hiring of contractors less attractive to medium to large businesses, which are affected by IR35.