What’s the state of #IR35 readiness amongst #MedComms freelancers in the UK?

IMPORTANT NOTE: The changes anticipated below were indeed, quite unexpectedly, delayed for one year due to the COCID-19 pandemic. The changes have been legislated for, however, and are now expected to apply as from 6 April 2021.

As far as I’m aware there’s been little public discussion, and little data published, about the possible implications of the planned #IR35 changes for the specialist community of freelancers working in or around #MedComms in the UK. I hope this data will spark more conversations, in public and in private. Time is quickly running out. I'd be delighted to see any comments and feedback. Cheers, Peter

It seems highly likely that changes to the IR35 tax rules in the UK will apply from 6 April 2020. The new rules will apply to end clients (the organisation that the Ltd status contractor ultimately delivers the work for) who 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

These will surely affect the working practices and relationships between at least some freelancers and their clients in the healthcare comms and medcomms industry but, for now, it's not clear exactly how. We wanted to gauge the state of readiness and attitudes amongst the UK MedComms freelance community as represented by subscribers to the MedComms Workbook service.

IMPORTANT - this survey ran between 18-23 February 2020. This is before the UK's Budget Statement, which is expected on 11 March 2020. 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 online here or download the PDF document 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 99 responses over the 6 days from subscribers to the MedComms Workbook. 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 most important point about the changes is that clients will decide on whether assignments are inside or outside of IR35 and take responsibility for managing the tax implications. There are potentially severe penalties for getting that wrong.

The clearest – and the most worrying - message from these results is how little the clients are communicating their plans to the freelancers. And yet we're only 6 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 online here or download the PDF document 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 Peter Llewellyn, published on LinkedIn, 18th February 2020: Why do you want to be a #MedComms Freelancer?
• From IPSE, 12th February 2020: a third of freelancers plan to stop contracting in the UK because of IR35 changes.

Cheers - and best of luck everyone.

Peter Llewellyn, Founder of the global MedComms Networking community

E: peter@networkpharma.com