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Constructing good contractor relationships: using IR35 to harness growth

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31 January 2022

Guest article by Musab Hemsi, Director, Anderson Strathern

IR35 – or off-payroll working – almost felt like a dirty phrase when it expanded from public into the private sector in April 2021. On balance, the administrative and organisational headaches pale in comparison to non-compliance, or outright contractor bans.

IR35 legislation should drive improved performance of third party contractors within organisations. The days of hiring a contractor based on a job description are over and there will be more thought process around what outcomes need to be achieved along with commercial arrangements. Defining and agreeing upfront what needs to be delivered will help companies to better manage performance and achieve desired outcomes. Indeed, companies that embrace this way of engagement should also consider using it as a blueprint to better manage the performance of their remote permanent workforce. The contractor agreement often sits alongside a statement of work; laying solid groundwork for a high-performing relationship. Add in the flexibility of contractors, along with their need to deliver to a high standard in order to secure future work, and IR35 compliance suddenly seems less of a bitter pill to swallow.

In or out – what’s the difference?

For companies that engage a flexible workforce, it is vitally important that line managers understand the difference between an inside and outside IR35 engagement, and how the working practices differ.

To avoid potential issues arising in the future, companies should be supporting their staff to ensure they are engaging flexible workers correctly. Status determination tests, contracts and insurances are all key elements of the process, but need to be backed up with a practical IR35 framework, policy and system of engagement.

read more [source: Anderson Strathern]