IR35: what does it mean?

IR35: what does it mean?

Posted by on Jul 31, 2017 | No comments

On 20th July 2017, CWJobs hosted an event ‘IR35: The End of Contracting?’. We were joined by a variety of experts from across the tech industry, each providing interesting insights into the oncoming tax changes.

A presentation by CWJobs Sales Director Dominic Harvey examined how the perceptions weighed up against the reality of the IR35 changes, using research conducted by CWJobs as a lens to view the current marketplace. This was followed up with an insightful roundtable discussion.

The roundtable explored how the IR35 would be enrolled by the government.

The group raised concerns that many of the IR35 terms are ambiguous or open to interpretation. Remit Resources’ Richard Morgan reiterated this, having said HMRC’s messaging “could be clearer”.

Determining whether you lie inside or outside of IR35 as a contractor appears to be no easy task. Perhaps this ambiguity exists because the real-world effects of IR35 will only be realised when it becomes a palpable reality, rather than a vague and contradictory set of rules, for contractors.

Cyberteam’s Kevin Ford agreed, suggesting that, “HMRC will investigate one public sector department in three to four years’ time to get a big tax chunk. Only then will we understand what the exact terms of the IR35 are”.

The fact investigations are to be executed on a case-by-case basis serves as evidence that any repercussions will take a considerable amount of time to be established.

When considering how IR35 could affect the public and private sectors, the consensus was that existing perceptions of a skills gap between these sectors was a large factor in how employers and contractors alike will react.

Sara Deed, Financial Controller at YOH, highlighted that there is a “shortage of skills in the market anyway. The private sector won’t reduce their rates to get lower skills”.

Richard Morgan agreed: “I don’t see a dilution of rates, because the private sector won’t take on lesser skills just to save a bit of money”.

Kevin Ford is aware these predictions can only take us so far. “No one knows how this will come out. Until a judge determines the first court case … then we’ll know the rules. Until then, we’re all speculating”.

Future Research

As ever, conversation also turned to the future of IT and tech, and how young people are being prepared for work in a world overloaded with social media and screens.

Account Director at CWJobs, David Holdback, questions whether the older generation’s “maturity” means we are “resistant” to change. Bridging the tech gap between millennials and experienced employees is essential when it comes to future recruitment. But is the gap a case of crossed wires? Do we need to change the way the industry appeals to young people, or is it the responsibility of young people to see the potential of tech beyond the realms of Snapchat filters and follower counts?

The questions raised from this discussion has made CWJobs determined to research further into young people’s relationship with tech and the recruitment process. As with our IR35 roundtable, we’re confident this will inspire further discussion and debate.

If you’d like more information about our IR35 research, or are interested in our future investigation into young people and the IT and tech industry, give us a call on 0333 0145 111, or read more at www.cwjobs.co.uk.

About the author: Francesca Parkinson

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