The IR35 Opportunities

Demand for information concerning IR35 is increasing. Our article for consumers outlining the regulatory changes, and the benefits of an accountant, was one of Unbiased’s most popular ever.

This demand is not surprising, as according to Sullivan and Stanley over half of businesses interviewed stated that IR35 is confusing and they don’t have enough information to move forward.

This a great opportunity for accountants to show their value, so how can you maximise every possible action?

Are Businesses Panicking?

Many consider IR35 a threat to their operational models, their tax arrangements, and their key talent.

This is the first opportunity: calming minds. Tell clients that there’s no need to panic, as this sort of regulatory change has been seen before.

The introduction of Article 13 placed the onus on online sharing platforms to handle the copyright of their content. Many considered this to be the end of companies such as YouTube, as they were now liable for any copyright infringements caused by the content on their sites. But YouTube is stronger than ever.

The same applies to IR35. Just because the onus is now on businesses, this doesn’t mean their current models must be torched to avoid heavy fines.

However, many companies are panicking - making knee-jerk reactions such as cutting employees to pay for contractors.

A measured analysis of their operating models will prevent unnecessary harm, and coming in as the voice of reason bearing good news will be gratefully welcomed.

Full Services Required

Over half of businesses are committed to changing their commercial model due to IR35, yet less than four in ten have a robust plan in place.

Businesses also view IR35 as an opportunity to host a wider review of their systems and workforce composition, and some are looking further by wanting to future-proof their business model. The scope of services that can be offered is huge.

To convince every client of their need for your full services, there are a number of points you can press.

For those seeking a quick-fix without further auditing, be clear that you can create enough long-term headroom to absorb any potential fees. The threat of lost money is powerful, and can be used to boost your upselling strategy.

For those that still don’t see this wider opportunity, make it clear that this decision is not just affecting businesses.

If contractors believe they’re under threat from their current arrangements, they will move to other, better prepared businesses. Show that the full audit you can provide is vital not just to mitigate fines, but to retain key talent.

In response to potentially losing their contractors, a third of businesses are considering bringing contractors in-house, providing an opportunity for you to advise on appropriate tax affairs. However, more than half of these businesses haven’t quantified the cost of doing this – offering you the chance to provide payroll services as well.

But be careful not to push your services only by threatening the downsides. Framing IR35 as a win-win for everyone can be equally powerful.

Contractors can retain the work status they enjoy with full confidence in their tax affairs, and companies can keep hold of this key talent. Company structures can be streamlined, payrolls can be optimised, and businesses can be future-proofed against further disruption by creating sufficient financial headroom and simpler tax arrangements.

With both the reward of better outcomes and the threat of financial downsides, IR35 is a great opportunity for you to be the voice of reason in stressful times, and show clients your full value.