The current economic conditions are bringing opportunities for professional interim managers, says the Institute of Interim Management (IIM), and they should use their professional accreditation as a quality assurance for clients as more people enter the market for interim assignments.
In its just-published newsletter, InterIM Insight, the Institute advises professional interim managers to be particularly careful to understand fully the implications of HMRC’s revised guidance on the need to register under the 2007 Money Laundering Regulations and also of the potential implications for IR35 of HMRC’s victory in the High Court Case against Dragonfly Consulting Ltd.
The professional Interim Managers which the IIM represents provide a business-to-business service to clients and operate as independent businesses. Unlike part-time or temporary workers, professional interims carry total responsibility for tax, insurance and other statutory or regulatory requirements. The client relationship, whether direct or through an interim provider, is subject to commercial law and not employment law. In a survey of members, 87% believed that the statutory and regulatory burden is increasing.
Commenting on the UK’s current economic conditions, IIM Chairman Tom Brass writes: “UK plc is feeling the pain and inevitably is moving to a period where even the strongest companies will need to change to survive, the weaker ones will need the attentions of the turnaround specialists, and the weakest will probably go to the wall. Change of this nature brings opportunities for the Interim – in many respects interim management is counter-cyclical, picking up the pieces on the way down, and providing resources as growth returns. However as newly-redundant employees come onto the jobs market, the number of available ‘Interims’ will increase, with consequences for both daily rates and quality of service. Members should make the professional accreditation of their Institute count!”
On the Money Laundering Regulations, the IIM was one of the professional institutions that made representations to HM Treasury about its earlier guidelines. HMRC has now published its revised guidance, in which it emerges that some Interims are still potentially affected by the MLR. Tom Brass advises interims: “If you may be in scope, you therefore must review MLR 9 carefully to see whether or not you actually need to register under these new rules to avoid incurring civil penalties.”
On the IR35 tax regime, the IIM advises professional interim managers to pay attention to the potential implications of the outcome of the High Court Case against Dragonfly Consulting Ltd. The case brought into close review the key aspects of many of the arguments hitherto used successfully to fend off suggestions by HMRC that a freelancer is self-employed rather than an employee of his/her client.
The IIM advises: “There is clearly much to digest as a result of this case, and any professional interim managers concerned that their contractual arrangements may be on the borderline in relation to IR35 should take urgent professional advice. The goalposts have been redefined more favourably for HMRC, and it is to be expected that they will take full advantage of this.”