How the IR35 reform consultation affects contractors

On Tuesday 5th March, the Government launched a consultation into how the off-payroll working rules should be implemented within the private sector from April 2020.

In particular, one of the big problems with the IR35 changes in the public sector was that contractors didn’t have any forum with which to challenge status decisions.

A key concern in the past has been that organisations may make ‘blanket’ determinations of the employment status of off-payroll workers and not understand the nuances of particular roles and relationships.

As a result, in the consultation, the Government is indicating that they will require end-hirers to provide specific reasons for each status determination and, if necessary, introduce a hirer-led status challenge process. Through this, a contractor would be able to put forward evidence to appeal a decision.

This is good news. Not only does it give contractors a route to challenge decisions, but it should also ensure that hirers take their responsibilities seriously and therefore exercise ‘reasonable care’ in their status decisions.

They will have to have good reasons for each outcome and contractors now have some comfort that, if a decision seems unfair, there is a ‘right to reply’ and a process to review evidence.