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The Impact of IR35 2020 Changes on the UK Life Sciences Industry

IR35 will undoubtedly affect the future of contracting in the UK. But it will be an evolution rather than a revolution.

January 2020

The Impact of IR35 2020 Changes on the UK Life Sciences Industry

 

What is Changing and When?

IR35 legislation changed in the public sector in 2017, where it became the responsibility of the Client to make the Status Determination. HMRC is now planning to roll out similar changes in the private sector. These changes are due to come into effect on April 6th, 2020.

At present, a contractor is responsible for making the Status Determination on whether he or she is inside or outside of scope regarding IR35. Beginning on April 6th, the End User (or Client) will take responsibility and be liable in providing the correct Status Determination for the contractor.

 

Who is Impacted?

In the Life Sciences industry, Contactors using a Personal Service Company (PSC), Clients and Intermediaries (e.g. Recruitment Companies) will all be affected. Each party will need to be aware of the changes and their respective responsibilities.

 

Better understanding IR35 status - Inside or Outside?

Whilst IR35 legislation appears to be cumbersome, there is a basic rule one can apply to ensure compliant solutions: "Does the engagement look and feel like employment?"

If the answer is yes, then the engagement is likely to be inside the scope of IR35.

 

How to Make an IR35 Status Determination

HMRC have provided their own tool knows as CEST so that Clients, Contractors and Agencies can make their own assessment.

https://www.gov.uk/guidance/check-employment-status-for-tax

While all parties (Client, Contractor, Agency) can use the CEST tool, it is the Client’s determination that is key. As well as CEST, a range of other tools are also available on the market to help all parties make their assessment.

"IR35 will undoubtedly affect the future of contracting in the UK. But it will be an evolution rather than a revolution."

 

So, What Now?

Interested in hearing i-Pharm's personal opinion on the new legislation and how it will impact the future of contracting in the UK? Get in touch with a member of our team to receive a copy of IR35 Guidebook.

 

Contact us for more information and a copy of our IR35 Guidebook:

Lauren McQuade

Team Leader, Contract Clinical Research EU

E: LMcquade@i-pharmconsulting.com

T: +44 (0) 20 3189 0488