IR35 delays lead to a U-turn on blanket ban decisions

The delay to the private sector IR35 roll-out has encouraged more employers to review their IR35 decisions with staffing companies reporting that over a third of hirers (35%) were making a U-turn on blanket decisions on taking on contractors.

The year extension has encouraged more employers to move away from HMRC’s widely criticised determination tool (CEST) and provided more time to better protect the entire recruitment chain, with 71% of participants indicating that they would now only use a tool that’s backed up by insurance.

It’s hugely encouraging to see so many employers reversing the blanket bans that were originally imposed, and we hope that more follow suit as organisations begin working with staffing companies to prepare and truly get it right this time around and correctly determine a contractor’s IR35 status.

However, while the government has delayed the roll out of IR35 until next year to avoid economic disruption during the Covid crisis, we believe that this is simply delaying severe disruption to the self employed workforce and is likely to further damage an already fragile economy.

Given that Covid-19 has dramatically changed the economic landscape, many politicians continue to call for the changes to be scrapped in favour of legislating change to employment status as recommended by the Taylor Review.

However as it stands today, the roll out into the private sector will happen as planned in April 2021.