As experts with 30 years’ experience in the recruitment and consulting sectors, Chris Jones and Michael Cleavely had a deep understanding of both parties’ concerns. With years of experience implementing contractor based solutions, they began to explore new possibilities.
Their solution? Colnort – a company that offers those affected by IR35 a mutually beneficial engagement model, and for clients a way to drive greater value and output from their contactor workforce through outcome service-based agreements . Find out how Colnort was born – and how it’s breaking new ground with its innovative and disruptive service model.
IR35: THE BACKGROUND
Back in 2010, the UK government committed to reviewing IR35. There were concerns that contractors were using Personal Services Companies (PSCs) as a loophole to avoid paying the tax and National Insurance paid by salaried peers. The government’s aim was to end this “disguised employment”. The result was far-reaching changes to the existing rules with huge implications for both interim staff and the organisations that hire them.
PRIVATE SECTOR INTERIM MARKET TURMOIL
Working at the heart of the industry, Michael and Chris saw the impact of IR35 first hand. For interim staff, IR35 meant a difficult choice. The IR35 legislation that has already been implemented in the Public Sector, states that employers are now responsible for deciding a contractor’s IR35 status. Those deemed to be working within IR35 will suddenly find themselves subject to PAYE – but without normal employee benefits such as paid holidays or sick pay. Though many contractors objected to such a decision being placed in a client’s hands, they had few alternatives. Meanwhile, businesses were also feeling the heat. Faced with the threat of HMRC fines for non-compliance, some large companies chose to avoid the problem completely by imposing a blanket ban on contractors. While some interim staff have chosen to go permanent, some of the best talent has opted to walk away. This has left companies without the staff they need to deliver all kinds of crucial projects as well as Business As Usual activities.
THE BIRTH OF A NEW SOLUTION
As businesses and contractors alike struggled with the proposed tax legislation, Chris and Michael began to think creatively. In Christmas 2019, they had a lightbulb moment: what if a new type of engagement model was possible? One that would shift the liability for IR35 away from companies? And give contractors the freedom to continue working outside IR35? Consulting the best IR35 tax experts in the country, Michael and Chris set about creating Colnort – a business that would offer something truly new in a highly competitive industry.
SHAPING A NEW KIND OF INTERIM BUSINESS
Colnort is designed to give all parties peace of mind. For clients, Colnort helps drive greater business performance through IR35 compliant deliverable-based service agreements. With interim staff employed by Colnort, companies are free to focus on their core business activities. Meanwhile, contractors get to continue running their limited companies – with IR35 insurance covered by Colnort and payment received within 24 hours of deliverable sign-off.
2020: A WINDOW OF OPPORTUNITY
Although IR35 has been deferred until April 2021, Colnort is busy helping clients and contractors take advantage of the reprieve to transition their working arrangements ready for 2021. Colnort co-founder, Chris Jones says
“This is just a delay – and one that we wish had come under better circumstances. Businesses that have imposed blanket bans, or those that have failed to put a plan in place altogether should use this time to implement a solution that does not take a one size fits all approach and makes fair assessments . Contractors should also be reminded that it’s their responsibility to self-determine correctly or face. They should try to get the right contracts in place with their clients.”
To get your arrangements right in time for the April 2021 IR35 implementation, call Colnort now on 0203 971 5667 or email hello@colnort.com
