CIPR urges IR35 scrutiny
A change in tax law, introduced last month, has had a major impact on independent PR practitioners working for public bodies through limited companies.
The CIPR has today published guidance on the change, introduced under IR35 legislation, and urged Government to closely monitor its rollout to prevent adverse consequences.
Impacts on independent practitioners (IPs)
The new rules mean independent practitioners - many with long experience of working with public sector organisations - may choose not to contract with such clients. As these changes may mean lower remuneration, they may charge higher fees to maintain their business income levels. The changes may also result in additional accounting and reporting overheads for IPs with these costs also passed on to their clients.
Impacts on public sector organisations
Public sector clients may be less keen to contract with IPs, depriving themselves of IPs' expertise, knowledge and experience, and affecting the efficiency of communication initiatives. When they do work with IPs, clients may need to pay higher fees, or undertake fewer projects with IPs to keep within budgets.
The rules governing the public sector from April 2017 seem particularly complicated and potentially unfair. While they may be taxed as though they are employees, independent practitioners do not receive any of the rights or benefits associated with employment, such as holiday or sick pay, or access to that employer’s pension scheme.
The CIPR is not clear why this change is being introduced only in the case of public sector clients. We urge the government to monitor the rollout, and if it has unintended consequences, to repeal it promptly.
About the Chartered Institute of Public Relations (CIPR)
Founded in 1948, the Chartered Institute of Public Relations (CIPR) is the Royal Chartered professional body for public relations practitioners in the UK and overseas. The CIPR is the largest membership organisation for PR practitioners outside of North America. By size of turnover and number of individually registered members, we are the leading representative body for the PR profession and industry in Europe.
The CIPR advances professionalism in public relations by making its members accountable to their employers and the public through a code of conduct and searchable public register, setting standards through training, qualifications, awards and the production of best practice and skills guidance, facilitating Continuing Professional Development (CPD), and awarding Chartered Public Relations Practitioner status (Chart.PR).