FCSA anticipates influx of public sector contractors challenging their IR35 statuses

FCSA anticipates influx of public sector contractors challenging their IR35 statuses

New research carried out by the Freelancer & Contractor Services Association (FCSA) has predicted that there will be a sharp rise in the number of public sector contractors deemed ‘inside’ IR35 who choose to pursue legal claims challenging their statuses in the months ahead.

Towards the end of April, Julia Kermode, CEO at the FCSA, warned that a backlash was expected following recent revelations that many such contractors had their IR35 status determined before HM Revenue & Customs (HMRC) rolled out it’s flagship Check Employment Status for Tax (CEST) tool.

The fact that the tool has faced so much criticism since it’s introduction further exacerbates the issue, as many contractors – regardless of how their status was determined – feel they cannot be certain how accurate their IR35 status really is in light of their circumstances.

According to the FCSA’s research, 50 per cent of public sector freelancers recruited via agencies were not subjected to any compliance tests, yet 42 per cent of such workers were automatically deemed ‘inside IR35’ regardless.

Meanwhile, of the remaining 50 per cent of survey respondents who claimed that they had been subject to a compliance test, 26 per cent underwent a ‘role-based’ assessment while 24 per cent had chance to take part in an individual assessment.

In short, the majority of cases did not exclusively rely on CEST to determine workers’ IR35 statuses – most likely because the tool was not released until “just weeks before” the new IR35 legislation affecting public sector contractors was phased in.

“It was already far too late,” Ms Kermode said.

“Public sector employers had already begun conducting assessments in order to hire new workers and to re-assess existing contracts months before the IR35 reforms came into effect. As such, they became reliant on other commercially-available assessment tools.”

As a result of this, the FCSA has estimated that there will be a sharp rise in the number of contractors seeking to challenge HMRC in relation to IR35 decisions over the coming months.

“More than one third of respondents (36 per cent) believe that legal challenges will now transpire as a direct consequence of role-based decisions being made and 34 per cent of respondents are expecting challenges to workers’ deemed employment status,” Ms Kermode said, citing figures featured in the FCSA’s survey.

“These statistics should be of real concern for the Government, and our survey suggests that it is in the medical, engineering and IT sectors where such challenges may come from,” she said.”

“Given all the issues implementing the changes in the public sector, it would be very damaging to the economy if the government was to rush to extend the IR35 reforms into private sector,” she added.

What do freelancers need to do in order to be GDPR-compliant?

The new General Data Protection Regulation (GDPR) will be in full force before the end of the month, bringing with it a number of important changes to individuals’ rights and the ways in which companies can collect, handle and store their data. But how will the new legislation affect contractors?

A recent report on contractor resource Freelance UK’s website recently set out to answer this very question, as many contactors and freelancers appear to be confused as to whether they will need to register under the GDPR.

In short, the answer is ‘yes’, as the GDPR is aimed at all organisations and individuals who hold or use personal data for business purposes, data protection solicitor Olivia Whitcroft pointed out in the article.

Naturally, this means that contractors have quite a lot to get the grips with ahead of the GDPR’s formal introduction on 25 May 2018 – which is, quite literally, just around the corner.

In order to be compliant with the new rules, contractors and freelancers need to start thinking very carefully about:

  • Whether they are using personal data ‘fairly’.
  • Keeping data up-to-date and secure.
  • Identifying the purposes for which they hold other people’s personal data.
  • Informing individuals that they hold their data.
  • Not holding any more data than is necessary.
  • Deleting data once the purposes it was initially collected for have been fulfilled.

Ms Whitcroft, who acts as a data protection and technology solicitor for law firm OBEP, said that contractors’ “GDPR obligations and associated compliance risks may not be as extensive as some other organisations, who may, for example, hold larger [or more sensitive] types of data.”

However, she said that contractors should not take this to mean that the GDPR will not require them to shake-up their existing processes in terms of data protection.

“You will still need to identify your uses of personal data, and apply GDPR requirements to [any business-related] activities,” she said.

If you wish to find out more information about the GDPR and what the new legislation means for you, please refer to the Information Commissioner’s Office (ICO) website here: https://ico.org.uk/for-organisations.

Freelancers all set to ‘shape the future’ of management consulting, report finds

Approximately 20 per cent of the UK’s annual £10 billion management consulting spend goes towards hiring freelancers and contractors to carry out independent consultancy work, a new report has revealed.

According to research carried out by consultant network Odgers Connect in collaboration with Source Global Research, freelance workers are all set to ‘shape the future’ of the industry, having become more and more popular in recent years, not just in the UK, but also in Germany, Switzerland and the Netherlands, too.

Odgers’ report reveals that 40 per cent of companies in the above four countries rely on an ‘even split’ of traditional consultancy firms and specialist freelancers, the latter of whom deliver £2 billion worth of skilled work every single year.

When asked why they have a growing tendency to turn to freelancers to carry out such work, almost half (48 per cent) of top executives quizzed as part of the survey said that ‘flexibility’ was the most attractive aspect of appointing contractors as opposed to companies.

This was followed by ‘price’ (38 per cent), ‘higher quality work’ (23 per cent) and ‘speed and ease of assistance’ (20 per cent), the report reveals.

And finally…

A woman who gave up a steady job to sell ‘slices’ of solidified ketchup is well on her way to starting a successful business, having secured more than £21,400 in funding and planning on opening a state-of-the art factory later this year.

Emily Williams, Michigan, USA, not only turned her back on a promising office-based career, but also managed to tear her former boss away from the company to help her kick-start ‘Slice of Sauce’ – a mess-free alternative to traditional tomato ketchup.

With the help of American crowdfunding website Kickstarter, Ms Williams and former boss, Thac Lecong, have managed to raise more than $30,000 (£21,400) towards their unusual business idea, which the duo claim offers up “a perfectly portioned bite of ketchup every time.”

The dried product, which is described as “all natural, no mess and flavour packed,” is made from vine-ripened tomato puree, cane sugar, salt, garlic, onion powder and distilled vinegar.

Following their successes so far, Ms Williams and Mr Lecong are hoping to open a new factory in Brooklyn, New York and launch their products across speciality food outlets by June this year.

Mr Lecong quipped: “It’s going to be like the first man on the moon, except this time the moon is a sandwich.”