APSCo responds government support for businesses and delay to IR35 changes

The UK Government has announced that, amid the current Coronavirus pandemic, the delay to IR35 changes will be for 12 months.

The news has been welcomed by the Association of Professional Staffing Companies – APSCo – the international trade body for the professional recruitment sector and by Stockport based Grassroots Recruitment.

Sam Hurley, Operations Director at APSCo and co-chair of HMRC’s IR35 Forum said:

“After five years of lobbying Government for a proper review of IR35, we are obviously pleased and relieved on behalf of our members that the Government has taken this action to remove extra burdens from the recruitment sector albeit disappointed that it has taken a crisis of this magnitude for the Government to act.

“Although many of our members have spent an enormous amount of time and resource getting ready for this change, we believe that this delay will be widely welcomed by all our members and the sector as a whole. Now is not the time to make flexible labour more expensive or the hiring of contingent labour more difficult, when our sector is facing unprecedented times. This delay may also have the added benefit of kick starting the hiring of remote workers who operate though a PSC from end clients who have so far, as a response to off-payroll legislation, put a blanket ban on contractors working through this model.”

Caroline Patten, Operations Director at Grassroots Recruitment also welcomed the news that changes to IR35 legislation will be held off for the next 12 months and added:

“It’s great news to hear the government’s decision to delay IR35 until 2021. It’s a massive relief for contractors, many of whom were still awaiting final decisions from organisations as to whether they would fall inside or outside of the legislation.

“For those for whom a decision had already been made, this will have little impact unfortunately but fingers crossed this will allow businesses to proceed with confidence when entering into new contracts or seeking to fill projects they expected not to go ahead.”

More broadly with regards to the government announcements on measures to support small businesses, Grassroots are receiving a mixed response from employers:

“Whilst there have been early casualties in some sectors and others are halting active recruitment campaigns to protect existing staff, many are experiencing a surge in demand or expecting to need a greater reliance on temporary workers in the coming weeks to prepare for staff absences” Caroline added.

“On the other side of the coin, we are experiencing a high volume of candidate enquiries from those who have been made redundant, had temporary contracts terminated or had their hours reduced to part-time. As far as possible we are trying to act as a conduit between businesses in need of additional support and those desperate to keep on working.”

Commenting on the other measures announced yesterday by Rishi Sunak, Tania Bowers, Legal Counsel at APSCo said:

“We are obviously pleased to see that the Chancellor has moved so quickly with a £330 billion stimulus package including expansion of the business interruption scheme introduced in the budget, cash grants to smaller businesses and a commitment to consult with both business and trade unions to determine what else may be needed. “

Rishi continued:

“As ever with these measures the devil will be in the detail. We have seen a massive increase in enquiries to our legal help-desk from our members – in the space of a week we have had numerous enquiries about SSP and contractor rights on top of the usual high number of queries around the implementation of IR35. While some of our larger members may well have the financial resilience to ride the current Covid-19 storm, we have to remember that the majority of recruitment firms in the UK are SMEs. This is a sector that will be hit extremely hard given that hiring intentions in many industries are likely to be put on hold or reduced for the foreseeable future.”

The full press release is available to read at APSCo