Contractor hiring bodies divided over IR35 consultation response

Two recruitment bodies each with markedly different approaches to how they are addressing proposed IR35 reform in the private sector are set to make Friday’s consultation deadline.

The REC says that despite the ‘lead proposal’ to extend IR35 reforms from public to private sector, a review and impact assessment should be the only new government decisions.

By contrast, APSCo, whose members also place PSCs, has disclosed a few recommendations it made to HM Treasury and crucially -- all of them imply the lead proposal will become law.

While that does not mean APSCo is uncritical of the consultation – on the contrary, it accuses its authors of trying to ‘lead’ its readers – it suggests managing the extension is now the goal.

It wants the extended “reforms to be as comfortable for businesses as possible” for example, and has urged Treasury officials for “enough time [for agencies] to properly prepare”.

The Recruitment & Employment Confederation (REC) does not entertain getting as far down the implementation road.

“Our message on IR35 is clear -- don’t rush ahead with changes,” the confederation says.

“Government…[should] undertake a comprehensive post-implementation review of the public sector changes and an impact assessment for the private sector so that these issues are fully captured.”

By ‘issues’, the confederation means “ new and difficult problems” created by the public sector IR35 reforms, and these problems “need to be tackled.”

The REC reflected: “A long-term approach to tax and employment status is needed, rather than tweaks to IR35 as this inevitably leads to more issues. 

That long-term approach “needs to take account of the varying business models that exist” in different sectors, added REC’s stakeholder engagement manager Karen O’Reilly.

She also believes the approach needs to end up ensuring that “businesses have the knowledge and capability” to deal with any new rules as currently, she says, “knowledge in the private sector of IR35 is low.” 

Sam Hurley, a director at the Association of Professional Staffing Companies (APSCo), which is hosting a IR35 reform session in Manchester on Wednesday for recruiters and end-clients, sounded some reassurance following a meeting with Mel Stride MP, the financial secretary to the Treasury.

“There seems to be a genuine desire to get this right,” Hurley said. “[We shared] member’s IR35 [reform] concerns…[including] the potential implications of implementing changes within an unrealistically short timeframe.”