Charlie Cox, Commercial Manager at SThree, spoke to People Management about the best ways to prepare for IR35.

In the article, Charlie discussed some of the key risks for businesses and contractors when navigating the reforms, which are set to be introduced by the UK Government in April.

And he gave his top tips on how to best manage the change that the new legislation will bring.

“With the reform of IR35 for the private sector set to happen in April, it will become the responsibility of the end client, as opposed to the contractor, to review current and future assignments to ensure that the contractor’s tax status has been correctly determined”, Charlie commented.

“The pitfalls with this piece of legislation lie not only in determining whether a contract assignment falls ‘inside’ IR35 – subjecting them to PAYE and potential higher taxes – or ‘outside’ IR35 – meaning contractors are allowed to pay themselves a salary, draw the remainder of income as dividends, and remain responsible for their taxes – but also how to best approach, and reconcile, contractors from both classifications.

“The undesirable consequence of conducting incorrect IR35 determinations could see the potential premature departure of contractors who will look for an assignment that is correctly determined with another end client.

“In this scenario, companies may face an increase in fees or rates for equal services and are likely to find themselves needing additional resources to replace those who have departed where a blanket determination has been made – ultimately putting a pause on scheduled work.”

You can read the full article, including Charlie’s top tips on avoiding the pitfalls of the rule changes here: https://www.peoplemanagement.co.uk/voices/comment/preparing-for-private-sector-ir35-reforms