Anne O’Donnell talks about IR35 in Forbes

Procorre CEO Anne O’Donnell was recently invited to contribute to a feature in Forbes magazine discussing IR35. The article was looking into whether the forthcoming regulation changes in April could signify the end of freelance contractors.

Alongside a variety of industry thought leaders from a mix of business and government, Anne provided some opinion citing the research we carried out as part of the Next10 launch, where we surveyed over 500 contractors from a range of sectors. From that research, Procorre found that many contractors could unknowingly be working with clients in ways that aren’t technically compliant with their independent status.

This included over half (52%) of the freelancers we spoke to admitting they use IT equipment provided by their client, 57% only work on one contract at any one time, and nearly a quarter (24%) said they work solely on-site for their client. All of which undermine independent status in the eyes of IR35.

Although the results of our survey that are featured in Forbes are quite alarming, as Anne also mentioned in the article, it’s important to understand there are a number of things that contractors can do to avoid falling foul of the forthcoming legislation.

Here’s also some further insight on the matter:

An estimated 900,000 UK-based limited company freelance contractors could technically be impacted by the April changes, when the onus shifts from the freelancer to the private sector engager to determine an off-payroll worker’s status.

For the freelance consultants that we have working within our talent pool, Procorre is providing stringent assessments on their current, new or extended contracts and are assisting them through detailed evaluations. We’re working hard to ensure all of the remediate steps have been taken in order for our contractors to continue to operate outside of IR35.

Take a positive approach

The contracting industry and its flexible workforce are a major contributor to the economy, so we’re hopeful that the HMRC’s changes will be applied fairly and opportunities for freelancers will still exist across the board post April.

If you’re an independent contractor and are concerned about how IR35 could affect you, the worst thing you can do right now is nothing.

Take a proactive, positive approach to get a clear understanding of how you could be affected by IR35 and seek out the necessary steps in order to correct uncompliant behaviours, and then be able to demonstrate this to existing and potential clients.

There’s no silver bullet  

IR35 does not signify the end of contractors but it could actually be time at the bar for umbrella companies, who provide only limited value to freelancers and contractors long term. We believe that with the effect that IR35 could have on the UK’s revered flexible workforce, there is a case for PAYE providers to work even closer with freelancers to empower them and preserve the consulting industry.

Despite some consultancy businesses out there promising the world, and even in some cases insurance policies, there is no ‘silver bullet’ to IR35. It’s a case of taking a pragmatic, sensible approach and being able to show you’ve taken due care in your assessment of freelance and contractor status. If the new rules are implemented fairly, we see no reason why people shouldn’t continue to pursue a career as a freelancer or contractor.

IR35 Procorre