The IR35 law is an opportunity to ask whether you have the right kind of consultancy working for you!
The UK’s IR35 legislation has caused a quiet revolution in the recruitment industry. The anti-avoidance tax legislation, scheduled to extend its reach to private companies in April 2021, has inspired many old-school contracting firms to re-invent themselves as consulting firms. In this guise, they create Statements of Work purporting that they provide teams as a service rather than providing people. While this makes IR35 easier to deal with, in reality, what they are providing has not changed at all.
From the client’s view on first glance, all looks good, these are obvious ways to ensure IR35 compliance while still getting access to the resource you need. But let’s use this change as an opportunity to step back and look at contracting and consulting in a new light.
Think of it this way, unless you are picking up a team that has just rolled out another implementation, what you are actually buying is a group of individuals, who have never worked together before, and were pulled together by a recruiter who not only does not understand your programme but is not vested in your success.
This new breed of recruitment firm is first and foremost a sales engine. When you peel back the veneer very few of their people have worked in technology, change programme or consulting roles. These sales engines are powered by highly skilled salespeople who are incentivised on the number of roles they fill, which often is far different for what the sales pitch claims or the Statements of Work states.
In some cases, these firms offer inducements to those interims and contractors you engage to influence you to hire additional resource through undeclared margin share. These discreet backroom deals are more common than we may believe; at the very least they may breach the client’s code of conduct, but they should be considered a breach of the corporate anti-bribery policy.
Boutique consulting firms are uniquely different from those firms that offer teams as a service. Boutique firms are operated by professional consultants and former corporate executives who have held senior leadership roles. They offer professional networks formed over decades of experience that can pull together teams of trusted colleagues with proven captivity to effectively work as a team. They offer transparency in terms of commercial arrangements, work openly on risk and reward agreements and respect the codes of conduct and ethics policies of the end client.
IR35 presents leaders an opportunity to break free from the traditional shackles of old-school contracting firms and to benefit from the knowledge, focus and capabilities that boutique consulting offers.
Executive Interim – Chief Transformation Officer & Chief Information Officer