IR35 guidance “falls woefully short” - IPSE

Posted On: 
22nd August 2019

The government’s new guidance on the changes to IR35 will be little use or comfort to clients and contractors next April, IPSE (the Association of Independent Professionals and the Self-Employed) has warned.

Andy Chamberlain, IPSE’s Deputy Director of Policy, commented: “The government’s guidance on the changes to IR35 next April falls woefully short.

“Not only does it not acknowledge how incredibly difficult it is to make accurate IR35 determinations; it also fails to offer guidance on how to do so.

“Similarly, it states that clients must take ‘reasonable care’, but then offers no guidance at all on what ‘reasonable care’ actually means.

“When the guidance declares that clients must decide the ‘employment status’ of workers, it also fails to mention whether that means they should consider employment rights such as holiday pay, sick pay and defence against unfair dismissal.

“That is no small omission when there is such confusion about employment status in this country.

“The guidance for agencies also falls far short of the mark. It does not even begin to consider who should shoulder the burden of Employers’ National Insurance liability.

“This has been a major cause of dispute and disruption in the public sector where, in some cases, it has effectively been deducted from the contractor and in others it hasn’t. This needs to be clarified.

“Although there is advice on what exactly defines a small business, there is no requirement in either the guidance or the legislation for this information to be passed on to contractors or agencies. This will lead to serious confusion about where IR35 liability ultimately lies. 

“Fundamentally, however, this is not really about the guidance. The changes to IR35 were a disaster in the public sector, and they will be even worse in the private sector. No amount of guidance can change that, and we urge the government to delay and rethink these reforms.”