There is no clear path ahead for IR35 in the private sector with different organisations taking different views of how to deal with it:

  • No one really knows what the end client is going to do at the moment
  • Sainsburys have said (very recently) that they will assess everyone on a case by case basis to see whether they should be treated as IR35 or not
  • I had thought the private sector would be more “punchy” about their approach than the public sector which largely took the view that contractors were a no-no from the cut off date
  • A couple of clients with the banks had heard that there would be no more contractors post January 2020
  • However it seems that they have had a reality check and some more specialist roles may still be retained on a self employed basis, they will buy in the service when required
  • It all stems back to whether the contract is indeed a true self employment which ultimately is down to control and to what extent the contractor is free to work when and how they want to
  • The game changer where there have been cases is the right and use of substitution as it takes away from there just being one person providing the service.

The likes of Sainsburys are relying on the HMRC tool which providing it is filled in honestly and in line with the contract being carried out, rather than just in writing, can be relied on in any dispute with HMRC. Ultimately it is up to the end client to make the decision, and if they deem the contractor as within IR35 then the contractor should stop using their company and get directly employed.  It is massively complicated to administer via a company!

This is a brief explanation of developments in IR35 in the private sector and may not apply to specific situations.  Every business is different so you should therefore seek professional advice before taking any steps based on the contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”