Are Inside IR35 Contractor Engagement Policies Good Quality Decisions?
If you encounter a speed limit sign, do you park up and climb out of your car before you reach it? Walk the rest of the way? And fall WAY behind your competition that's capable of driving at 30mph? Many big business decision-makers have driven their organisations to blanket Inside IR35 engagement of contractors. I wonder how truly confident they are about the quality of those decisions. Do they properly understand the impact? They'll argue it's elimination of risk. Do they really understand the size and nature of that risk? Do they realise they introduce a potentially far more damaging risk in its place? When there are other ways to mitigate IR35 compliance risk than walking away. You can just comply. As compliance experts, should you not be steering your leaders along a compliant path that's the most beneficial and optimal? Not just the path of least apparent resistance?
Notwithstanding the fact some contractors will have really felt they had no choice, and that there will therefore be many top contractors that have been unreasonably forced Inside IR35, some contractors choose to hold out for or insist upon an Outside IR35 contract. If they can afford to do that, they presumably secure and retain work easily. Inescapably, an Inside IR35 policy will restrict hiring managers' and their organisations' talent pool reach, and many contractors they are missing out on will be amongst the best. Who will be benefiting from their talent and their top quality service? Their competition!
How many contractors, recruiters and hiring managers greeted the news of the IR35 reforms repeal with a little bit or a lot of a cheer? And three weeks later were utterly deflated by the U-turn? To all of those HR, compliance and legal folks out there, your hiring managers DON'T HAVE TO STAY DEFLATED. If you are engaging contractors inside IR35 simply to avoid the compliance obligations, when you are pretty sure or even suspect Outside IR35 would be legitimate, then you are compromising your talent and quality reach and frustrating your contractor resources when you almost certainly don't have to. All you have to do is COMPLY. There's a major opportunity here for the compliance and controlling functions in business to add enormous value for your employers. Turn IR35 compliance into an enabler, not a competitive disadvantage.
There's no doubt a wide spread belief or perception that IR35 rules and compliance are so horribly cumbersome, complex and confusing they aren't worth the risk. They often are positioned that way, but they don't have to be if you choose the right approach and the right help. It's just there are a large number of people and organisations for whom that perception is enormously beneficial. 34square isn't among them. We have exposed the simplicity of compliance in an explicitly and meticulously guided assessment questionnaire, that even guides you on how to refine your engagement attributes and responses to bolster Outside IR35 credentials. And if you ARE compliant, you pretty much guarantee HMRC won't waste their time on you. They are not interested in pursuing compliant organisations. And in pursuing those they suspect are non-compliant, they take a risk-based approach in their targeting of disputes. Which means they have to heavily suspect.
HMRC are NOT against Outside IR35. They have engaged hundreds, perhaps thousands of Outside IR35 contractors themselves, and continue to do so. They are ONLY against pseudo-employment. And at 34square, we can help you to robustly and confidently comply with minimal effort... a few minutes per resource, no financial outlay for recruiter or client and a throwaway annual subscription for the direct beneficiary, the contractor. They aren't the ONLY beneficiary. What recruiters and client organisations can gain is competitive advantage; competitive edge.
With 34square, you can complete an assessment in minutes, with full workflow and electronic signatures on Status Determination Statements, a declaratory one for clients and a confirmation of receipt for worker and fee payer. Plus you get automatic secure storage of documents in your own documents library. We also uniquely bolster the workers' outside IR35 credentials profoundly with the substitution capabilities on our platform. And yes, we bolster your credentials even if a substitute is never used, as long as you have the right to do so in your contract. Why? Because you can demonstrate intent and immediate capability to do so should the need arise, but HMRC cannot FORCE anyone to actually carry one out. The reason it has always been stronger to have actually executed a substitution is because it was difficult or impossible to demonstrate you could or would, if you hadn't. With 34square, you can. Read more here: www.34square.com/substitution. Why would you not?Now if it took material effort and investment to comply, it might be worth the intellectual contemplation as to whether avoiding that effort compensates for your loss of competitive edge. But it doesn't take material effort or investment. In what other conundrum are decision-makers so lazy or dismissive when it comes to competitive edge?