IR35 – Is your workforce in shape?

The world of employment changes in 2020

After years of softly, softly approach to IR35 in the private sector, the kid gloves come off, and the government will begin to apply the legislation as robustly as it has in the public sector.

This means that within the next 18-24 months, many organisations will need to revisit the composition of their workforce and the way they manage talent, achieve organisational effectiveness and approach workforce planning. 

PageGroup and Change Associates have combined forces to understand how organisations that may be affected by these changes can prepare now to establish their workforce of the future.

We conducted a survey with more than 350 contingent workers and interviewed experts and leaders in the public sector who have already experienced the greater enforcement of IR35.

Our findings, which we’ll summarise in a future blog, were presented at a breakfast seminar at PageGroup’s Holborn headquarters.

The Shape of the 2020 Workforce: the impact of IR35

The event featured contributions from panellists Catherine Hearn, Director of Resourcing and Talent at the BBC, Keith Robson, Interim Chief People Officer at FutureLearn, and Doug Rode, Senior Managing Director at PageGroup.

You can see highlights from the event on YouTube.

The keynote speaker was Matthew Taylor, Chief Executive at the RSA and Director of Labour Market Enforcement for the Government. In July 2017, Matthew published the report, Good Work, an independent review into modern employment, commissioned by the UK Prime Minister.

Matthew described IR35 as a levelling of the playing field that necessarily strengthens the links between employment status and tax status. He expressed concern about the large number of leaders he had met who were either ignorant of IR35, considered it a matter for freelancers rather than organisations or were consulting with ‘experts’ to find ways around it.

At the other end of the scale, large organisations have terminated all contingent workers; a costly and damaging knee-jerk reaction that suggests a lack of understanding of the legislation. A contingent workforce is not only possible under IR35, it is to be encouraged as a way of bringing new skills, capacity and agility to organisations.

The primary problem comes when it is used as a vehicle for avoiding tax.

Matthew concluded by emphasising the need to create good work for all workers by ensuring:

  • A sense of purpose
  • Teamwork
  • Fairness
  • Autonomy


It’s a culture he sums up as Creative Communities with a Cause.

In a Q&A session following Matthew's presentation, Keith Robson, a highly experienced interim, expressed a hope that employers would find a compromise that would satisfy HMRC and limit the impact, but his fellow panellists were less sanguine.

Catherine Hearn of the BBC, which employs 120,000 off-payroll workers each year, has already been through the process. She warned the audience, “You don’t know what’s about to hit you!”. The BBC, which came under greater scrutiny than most, recognised that while superficially IR35 appears to sit with Procurement or Finance, it’s actually really about people.

“It’s about transparency, fairness and compliance. People don’t feel safe, so talk to them. Be honest. Be clear. Talk to them now”.

 

The BBC has worked hard to ensure it offers a compliant contingent workforce, and as a consequence, people feel reassured.

Doug Rode of PageGroup agreed. Like Matthew Taylor, he expressed concern about the number of organisations looking for a workaround rather than seeking a way to ensure address IR35 head-on. He added that a degree of naivety amongst contingent workers, which was reflected in our research, added another level of complexity.

Do you need help with IR35?

We’ve combined the resources of PageGroup and Change Associates to create a comprehensive solution for organisations preparing for IR35. Outsource your IR35 preparation to us, and we’ll make sure you’re ready for April 2020.

Email info@changeassociates.com

 

Download the research report The Shape of the 2020 Workforce and the Impact of IR35 here.

 

 

 

 

Last updated: 15 Nov 2019