Seven out of 10 construction firms not ready for changes to IR35 legislation, reveals survey

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8th December 2020 19:04 - Construction

Seven out of 10 construction firms not ready for changes to IR35 legislation: A survey of medium and large construction firms has revealed that around 70% are not 'fully prepared' for changes to the IR35 tax legislation, which will come into effect in April 2021.

The research by construction HR specialist, Randstad, polled 200 companies in October 2020, and found that around a quarter (26%) had no knowledge of the change in legislation, or the implications for their business. This is despite having 12 months to prepare for the changes due to delays because of Covid-19.

More than two-fifths (44%) revealed they were aware of the changes and need to get their company ready for them, or have started the process, while three in 10 (30%) said they have made provision for the rule changes.

When asked if their business will cope with the additional costs as a result of changes to the IR35 legislation, 43% said that they were 'unsure' as they are not certain what the additional costs might be to their company, while 13% said they do not anticipate any additional costs.

A quarter (26%) said that they have assessed the costs to their business and have sufficient resource to cope, while almost a fifth (19%) said that in the current climate they will struggle.

Owen Goodhead, managing director at Randstad Construction, Property and Engineering said: “Tax regime changes are likely to have fallen on the backburner given the upheaval generated by Covid-19, with survival mode kicking in for many.

“But these changes will have a deep impact on recruitment and HR processes and operations, with the need for in-depth stakeholder training and deployment of new management tools.”

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