Peter Holliday, Managing Director of Sopra Steria Recruitment comments on the changes to IR35 as outlined by the Chancellor in the last budget.

As I’m sure you are aware, with effect from April 2017, the public sector users of limited company workers and/or the recruitment companies will be responsible for deciding whether IR35 applies. This means that the public sector employer (or relevant third party) will be obliged to operate PAYE in real-time on the payments it makes to the worker’s recruitment company and will also be required to account for the associated employer national insurance liability. 

These new measures could impact negatively on organisations who use self-employed workers – it poses a huge commercial risk and threatens to destabilise the professional flexible labour market. HR departments will have to support the additional administrative work load that the change in the legislation will create considering the complex assessments and tax calculations. I’ve included the comment below. Please let me know if you would be interested in speaking to Pete on the topic or an opinion article on this. 

Peter Holliday, Managing Director of Sopra Steria Recruitment: “This latest development will have a huge impact on public sector organisations who rightly and justifiably use self-employed workers as a complement to their own employees. We work with many public sector HR departments and we are concerned that they will face the significant administrative burden of complex assessments and tax calculations for self-employed workers. Fundamentally, this government proposal defeats the object of the flexible workforce and creates a risk to UK PLC.”