As we know, IR35 changes are fast approaching and are set to have a colossal impact on businesses and contractors. Therefore, it is vital that businesses are taking preparatory steps to prepare for IR35 in order to save them time, money and HMRC penalties.

Despite this, recent surveys suggest that more than half of UK businesses are planning a blanket approach to IR35 changes due to a supposed lack of time to assess contractors individually. Whatever the reasoning, it is alarming that businesses are even considering a blanket approach to IR35 changes, let alone relying on it. In this blog, we discuss why you shouldn’t use a blanket approach to IR35 changes and the alternative, and indeed preferable, approach. 

The downsides of a blanket approach to IR35 changes

If a business takes a blanket approach to IR35 changes it will likely result in the following:

• Contractors may be forced to work inside IR35.
• Businesses will cease using contractors who work via personal service companies.

On the surface such a blanket ban may seem beneficial for businesses in that it can save valuable time, money and resources. However, in reality, it is an incredibly bad move that can prove costly for both businesses, end clients, and contractors. Below are just a few of the consequences that could arise from a blanket ban:

• Instant 13.8% increase in cost to clients as they will now have employers’ National Insurance to pay
• Opens contractors up to historic investigations, despite HMRC claims
• Damage to company reputation
• Companies risk losing the top talent who will look to provide services to someone willing to assess their contract on its individual terms.

With such serious repercussions, it is apparent that a quick-fix, blanket approach is not the answer to upcoming IR35 changes. So, what is the alternative?

A Bespoke IR35 Protection Service

Instead of a blanket approach to IR35 legislation changes, Optimus Shield offers an IR35 service that: