How have the new IR35 tax rules in the UK affected #MedComms freelancers?
Off-payroll working (IR35) tax changes in the UK finally came into force from 6 April 2021. A year later than planned. Seven months on, I asked subscribers to the MedComms Workbook service - see medcommsworkbook.com - about their experience so far. Participation was on an entirely anonymous basis and we collected responses from 91 individuals. This was not intended as a robust study, but will hopefully provide a useful barometer of sentiment amongst our specialist community, and provide a valuable insight into current working practices.
I'm keen to read comments from other freelancers and also anyone who has to commission freelancers across our specialist community. MedComms is booming at the moment. There's more work than most people can handle. That's already leading to all sorts of resourcing challenges for many. Is IR35 then a complicating factor? The results show very different experiences amongst this group of freelancers. But, importantly, a very strong resistance overall to working in any way inside IR35. Where does that leave those medium and larger size MedComms companies that are trying to implement the new rules?
How do these results compare with you own experiences?
As always, the text comments offer valuable insights and are worth reading in full.
What do you think? Please do share your thoughts below or message me directly, in confidence as needed...
And if you don't know what the IR35 rule changes are all about, and what they might lead to, I'd strongly encourage you to turn to Google and learn quickly!
Here are just a couple of references to get you started.
From Peter Llewellyn, published on LinkedIn, 15th February 2021: Now what's the state of #IR35 readiness amongst #MedComms freelancers in the UK?
From Peter Llewellyn, published on LinkedIn, 18th February 2020: Why do you want to be a #MedComms Freelancer?
From Peter Llewellyn, published on LinkedIn, 25th February 2020: What's the state of #IR35 readiness amongst #MedComms freelancers in the UK?
Cheers - and best of luck everyone.
Peter Llewellyn, Founder of the global MedComms Networking community
E: peter@networkpharma.com
I was interested to see several comments in the survey around companies asking their freelancers to become Ltds rather than act as sole traders. In our experience, working with sole traders is far easier from an IR35 perspective. Any freelancer who is a sole trader is welcomed at Oxford PharmaGenesis contact us through freelancer@pharmagenesis.com
Thanks, Peter, for conducting this survey, the comments are very interesting. One of the things that I am very unclear about is what constitutes a 'project' in a outside IR35 contract in med comms. If you are a Ltd company writer who is providing support for, say, a particular account positioning a product/leading up to launch in a particular indication, is that a project? Within such a project over a few months you might complete different pieces of work with deliverables such as conference reports, competitor analyses, training materials for pharma staff, drafts of research/opinion papers etc. Is that OK as I think it is, or would that sound like a series of tasks to HMRC, such as an employee might get? Does each piece of work need a separate IR35 assessment/statement of work, or just the overall project? I am keen to comply with IR35 rules so that I have peace of mind that my clients and I are doing the right thing, but the lack of clarity of what the rules are makes me nervous.
Speaking as a sole trader, I feel agencies really need to take some time out to review all their IR35 working methods and come up with plans that are feasible going forwards, as opposed to what I can only assume were some panic-induced and quickly drawn up strategies put into place last year/early in 2021. Sole traders are 'safer' from an IR35 point of view, and I'm not sure some companies realise what a PITA it is to not work under a normal invoicing system (i.e. going under an umbrella company or PAYE). If some medcomms agencies can work with sole traders without any IR35 concerns, surely all can?
Thanks for doing this Peter, as Sarah has said it has been an interesting read. I am limited, VAT registered and only working outside of IR35, but I am not convinced my large agency are doing the right thing - as a result, each new project I get with them, I run my own IR35 CEST and keep a record of it. I am intrigued by the comments about IR35 indemnity clauses in the contracts. So far, I have only had one of my regular agencies send me a fully updated contract, others have said they are happy to stick with my original, and if I wanted a new contract I probably wouldn't like all the legal terms and conditions and clauses. I have ensured all my contracts contain the main buzz terms such as sub contracting, working where I want, when I want, how I want etc., and those where I am giving say up to 21 hours a week, they state in the contract that they do not have to fulfil that number of hours, nor do I need to accept all the work. However, if others wouldn't mind sharing the IR35 clauses they have had to push back on, I would be very grateful. Another comment that I wouldn't mind clarification on was the bit about having a company email address and being client facing. I am client facing, and have a number of different company email addresses, and when I run the CEST tool and include I have a company email address, I come back as being outside IR35 so I didn't think this was a problem.