Now what's the state of #IR35 readiness amongst #MedComms freelancers in the UK?

Very nearly exactly a year ago, I reported a survey asking "what's the state of #IR35 readiness amongst #MedComms freelancers in the UK?". There was confusion. Uncertainty. And, worryingly, mostly the clients weren't communicating their plans, 6 weeks before the expected changes. Then along came COVID-19 and everything changed. Long story short, the IR35 changes that were about to be passed into law, were delayed a year. One year on, the primary legislation has been passed. Nobody expects another delay. We're expecting the changes in April. So I wondered, are we better prepared? And I repeated the survey. Has anything changed? Not really and there's still precious little communication between clients and the freelancers and little public discussion. We now have 7 weeks to go.

>> Browse the complete set of results from our 2021 #MedComms IR35 survey here

>> Download a PDF document that captures all the data including free text answers here

Read on and please add your own comments and insight so we can encourage everyone across the #MedComms community to at least consider if the rule changes might affect them.

Different people and organisations will be affected in different ways. Some a lot. Some not at all.

It's important to note, the basic IR35 type rules aren't new as such. Anyone who has worked independently on a Sole Trader or Limited company/partnership basis will be aware of the rules of self-employment and, of course, those still apply.

These upcoming changes apply specifically to freelancers and contractors who work through their own Ltd company, and to end clients (the organisation that the Ltd status contractor ultimately delivers the work for) that meet two or more of the following criteria:

• A turnover of £10.2m or greater

• A balance sheet of £5.1m or greater

• 50 or more employees

The most important point about the changes is that these clients will decide on whether assignments are inside or outside of IR35 and take responsibility for managing the tax implications. But the rules are open to interpretation and there are potentially severe penalties for getting it wrong.

IMPORTANT - our latest survey ran between 18-14 February 2021. This is before the UK's Budget Statement, which is expected on 3 March 2021. So, there's a possibility, however unlikely, that the changes will be delayed or indeed abandoned.

Note participation was on an entirely anonymous basis and the results are then being made freely available to all.

>> Browse the complete set of results from our 2021 #MedComms IR35 survey here

>> Download a PDF document that captures all the data including free text answers here

This was not intended as a robust study but will hopefully provide a useful measure of sentiment amongst our specialist community and prove useful to companies that are currently planning how working practices might need to change.

We received 92 responses over the 6 days from subscribers to the MedComms Workbook service. It should be noted that most respondents categorised themselves as writers. It would have been interesting to see more results from client services freelancers since it's widely assumed that many of those must expect to shift to working inside IR35 from 6 April. Arguably, there is more uncertainty around writers, more of whom can be engaged on defined projects.

The conclusions are essentially exactly the same as a year ago.

The clearest - and the most worrying - message from these results remains how little the clients are communicating their plans to the freelancers. And yet we're only 7 weeks away from the likely implementation of the changes.

We go on to show that many of these freelancers are expecting the changes to impact negatively on their income. They are generally resistant to working inside IR35 at all, at least without increasing their rates, and they don’t favour working through Umbrella companies. Yet it’s noteworthy that the majority seem determined to continue to work as freelancers. Will they achieve this in practice? Will clients offer work on acceptable terms?

In the absence of public guidance from the clients I can only speculate based on the very limited discussion I’ve had, much of which has been on a strictly confidential basis. But it seems obvious there is a disconnect here. Client companies are talking about engaging freelancers on a PAYE basis, making more use of Umbrella companies and inviting freelancers to transfer to employment contracts. What if the freelancers don’t play ball?

On the one hand, clients need the work done. This industry has become quite reliant on a flexible, freelance community of medical writers, editors, proof-readers, account managers, project managers, publication planners, strategic consultants, event organisers and designers amongst others.

On the other hand, freelancers need to earn a living.

>> Browse the complete set of results from our 2021 #MedComms IR35 survey here

>> Download a PDF document that captures all the data including free text answers here

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 the HMRC. Important facts for contractors - off-payroll working rules (IR35)

The IR35 Hub from IPSE (the Association of Independent Professionals and the Self-Employed)

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