Last-minute study suggests worrying lack of awareness of IR35 reforms

Just days ahead of 6 April 2017, a new study has found that around half of agencies and public sector companies are yet to make preparations for imminent IR35 reforms.

According to last-minute research, 50 per cent of agencies and public sector companies are yet to make contact with their contractors regarding the changes, which will come into force this week on 6 April, in line with the beginning of the new tax year.

The new rules effectively mean that public sector end-clients will be responsible for determining the IR35 status of workers who operate through personal service companies (PSCs) and other intermediaries.

In the event that a worker is caught within IR35, the reforms will also make the fee payer or recruitment agency involved responsible for deducting and paying that worker’s National Insurance and tax.

However, the study, which was recently highlighted in Recruiter, quizzed as many as 2,000 UK contractors and found that only 4 per cent believe that public sector clients are adequately prepared for the rule changes.

80 per cent of those quizzed said that they were ‘certain’ public sector companies were unprepared for the imminent changes, while 16 per cent said they were ‘not sure’ how prepared public sector engagers are.