IR35 delay leads to U-turn on blanket bans

The delay to the private sector IR35 roll-out has encouraged more staffing firms and employers to 'get it right this time around', with recruiters reporting that over a third of clients (35 per cent) were making a U-turn on non-PSC decisions.

According to a recent survey of recruitment businesses carried out by Kingsbridge Contractor Insurance, the extension has encouraged more recruitment businesses to move end-clients away from HMRC's widely criticised determination tool (CEST). While 31 per cent of respondents revealed they were using it in the run-up to April 2020, just 18 per cent are planning to use it this time round.

Thomas Wynne of Kingsbridge Group, said: "It's hugely encouraging to see so many businesses reversing the blanket bans that were originally imposed, and we hope that more follow suit as organisations begin working with staffing companies to prepare and truly get it right this time around. With contingent labour likely to play an even bigger role in the UK economy over the coming few years as companies seek flexible resources in an uncertain market, it is more critical than ever that robust processes are in place that allow talent to be engaged in a compliant way."

Ann Swain from agency group, APSCo, said: "We know that access to skilled, flexible contractors has long been a strong contributor to the UK economy. They are highly skilled and utilise their expertise to carry out a specific assignment, helping firms to adapt, evolve and achieve success and these contractors will be especially important throughout the post-coronavirus economic recovery.

"While the Government has delayed the roll out until next year to avoid economic disruption during the Covid crisis, we believe that this is simply delaying severe disruption to the self-employed workforce and is likely to further damage an already fragile economy."