The UK government's changes to the IR35 legislation have brought about significant changes in the way medical devices companies operate. The new rules, which came into effect in April 2021, have led to an increase in the demand for outside IR35 roles within the industry. In this article, we will explore what outside IR35 roles are and why they are important in the medical devices industry.
What is IR35?
IR35 legislation was introduced in the year 2000 to tackle the issue of "disguised employment." It is a set of rules that determine whether a contractor should be classed as an employee for tax purposes. IR35 applies to contractors who work through a limited company but would be considered employees if they were contracted directly to the end client.
The changes to IR35 legislation mean that medium and large-sized businesses in the private sector are now responsible for determining whether a contractor falls inside or outside IR35. If the contractor is deemed to be inside IR35, then the end client is responsible for paying the contractor's income tax and National Insurance contributions.
What are Outside IR35 roles?
Outside IR35 roles are those that fall outside the scope of IR35 legislation. Contractors who work in these roles are not classed as employees, so they are responsible for paying their own income tax and National Insurance contributions.
The new rules have made it more attractive for medical devices companies to hire contractors for outside IR35 roles. These roles provide companies with greater flexibility and cost-effectiveness compared to hiring permanent employees. They also offer contractors more control over their working arrangements and pay rates.
Why are Outside IR35 roles important in the medical devices industry?
The medical devices industry is highly regulated, and companies need to ensure that they comply with various regulations and standards. Hiring contractors for outside IR35 roles can help companies to meet these regulatory requirements while remaining cost-effective.
Medical devices companies need to be agile and responsive to changing market conditions. They need to be able to quickly scale their workforce up or down depending on demand. Hiring contractors for outside IR35 roles allows companies to do this without committing to long-term employment contracts.
Additionally, the medical devices industry is constantly evolving, and companies need to stay up-to-date with the latest technologies and innovations. Hiring contractors for outside IR35 roles can bring in specialist skills and expertise that may not be available in-house. This allows companies to stay ahead of the competition and remain innovative.
The changes to IR35 legislation have had a significant impact on the medical devices industry. Hiring contractors for outside IR35 roles has become more attractive for companies, providing them with greater flexibility and cost-effectiveness. These roles allow companies to meet regulatory requirements, be agile and responsive to changing market conditions, and bring in specialist skills and expertise. As such, outside IR35 roles are crucial for the continued success of the medical devices industry.