For those in the contracting and recruitment agency industries 2021 was a time that saw significant changes and challenges. With the restrictions of the COVID-19 disease still being enforced, Brexit and IR35 reforms for large and medium enterprises within the private sector, coming into effect in 2021, there was a significant amount to be aware of.Spring Budget bring IR35 .With rumors that IR35 reforms might be extended to small-sized businesses Could 2022 bring the same problems for the industry of contracting?
IR35 changes for small-sized businesses
Industry experts have been debating for some time when (not when, but if) reforms are extended. This will ultimately mean small companies that contract with contractors would have the task of determining a contractor’s classification in the context of IR35 law.While it is believed it is possible that the high chance that the government will extend the offer to small enterprises in the spring Budget that is expected to go out on March 23rd However, many are of the opinion that its launch will be until quite a while considering the difficulties faced by this sector in the wake of similar reforms to the public sector as well as last April’s changes for medium-sized to large enterprises in the private sector.
HMRC has stated that it’s ‘too early to be able to judge the rules of 2021 in a proper manner as, until the full effect of these changes is fully assessed it is highly dangerous to extend the rule to additional companies.Naturally, the soft-landing of IR35 reforms that followed their implementation in April 2021, will come its end by April. which means that companies who made a “false mistake’ that ultimately resulted in non-compliance are penalized financially.
Incorporating small companies within the private sector IR35 reforms in the first stage can result in a myriad of issues for the sector. However, our team with Exchequer Solutions are expertly equipped to help our clients navigate the transition should it ever come into effect, much like we were able to do for the last reforms.
