HR professionals spend up to £500,000 on IR35 preparations

Management consultancy Procorre surveyed more than 500 UK HR professionals to find out what IR35 could mean for consultants and the private sector.

The research found over a third (36 percent) of medium-sized businesses - with between 100 and 249 employees - are spending up to £499,999 on getting ready, increasing to almost half (48 percent) of those with between 250 and 499 employees

Procorre also surveyed 500 contractors on the same topic and found that the contractors could unknowingly be working with clients in ways that aren’t compliant with their independent status. For example, nearly a quarter of those surveyed (24 percent) work solely on site for their client and 57 percent work on only one client contract at any one time.

The management consultancy said even smaller things like using a client’s email address domain, which nearly three quarters of those surveyed do (72 percent), can undermine contractor status.

As the responsibility shifts from contractor to private sector engager to determine off-payroll workers status next April, the research finds that many HR professionals within those client businesses are struggling to make the necessary preparations.

Of those surveyed, 47 percent said that since the changes to IR35 regulations in the private sector were announced they’ve been “drowning in paperwork”, while half said they’ve found it difficult to concentrate on other tasks and that planning for the changes has “taken over their time”.

The research also found that more than half of respondents (51 percent) think contractors will definitely increase their rates after the changes and 68 percent are worried that highly-skilled contractors will be driven abroad to the advantage of their competitors.