The Recruitment and Employment Confederation, along with leaders from 14 UK recruitment firms, have written to the Chancellor calling for a delay and an urgent review into the upcoming IR35 legislation.

From April 2020, IR35 reforms will be extended to medium and large organisations in the private and third sectors, which will then be responsible for determining the tax status of its contractors.

In the letter, the REC and the recruitment firms, made two suggestions including adopting an independent Chair and body to review, as well as taking in lessons from the public sector implementation.

“Our primary concern is that the effective regulation of umbrella companies government has promised will not be in place in time for April - creating huge opportunities for avoidance,” the letter states. “At the same time, compliant companies won’t have enough time to understand all the legislation given the significant delays that have taken place. Through no fault of their own, they will have insufficient time to work with their clients to get the approach right. We are already seeing examples of projects being binned and work taken offshore, damaging growth here - and ultimately, the tax take.”

“Making any necessary changes in 2021 would give space for a more detailed review and also grant government sufficient time to implement any suggestions from it - including effective enforcement. The current timetable leaves only 17 working days between the publication of final legislation on March 11 and implementation on 6 April,” the letter continued.

Among the companies whose leaders signed the letter include The Adecco Group UK and Ireland, Reed, Harvey Nash, Hays, Impellam, ManpowerGroup, Morson Group, Independent Clinical Services, nGage, The Staffing Group, Randstad, Staffline, Best Connection Group, and Pertemps.

Earlier this month, the government announced a review of changes to IR35 aiming to address growing concerns from businesses and affected individuals about how the rules will be implemented.