In 2016 Merit Software was the first software company to develop an update to its payroll package for recruitment agencies, to allow effective management of the IR35 legislation for the public sector. The recent announcement of the extension of these rules into the private sector has meant Merit have widened this development, and according to the company, Merit Software customers could be up to three years ahead of their competitors. However, concerns have been raised as to whether other software packages will be ready in time.
HMRC have recently published confirmation of the proposed changes and Merit Software says this will leave many recruitment agencies worried that their software supplier will not be able to provide a solution in time. Back in 2016, many software suppliers decided not to amend their packages to cope with the legislation as it only affected a smaller number of agencies. The new announcement means that potentially all agencies could be affected from April 2020 meaning that even if they start development now, many software houses would have only a few months to develop, test and deploy a major change to their packages.
Sam Radion, Sales Director at Merit Software, commented: “Along with the upcoming Good Work Plan there are some major changes in the legislative landscape for recruitment agencies and the most recent confirmation of the off-payroll changes for agencies engaging with PSCs is going to affect many of our customers.
“We were pleased to be the first to market with a solution for the IR35 reforms in 2016, and speaking to customers in the process of moving to us as well as prospective customers, we know that other providers are going to struggle to update systems or may even withdraw support. The fact there is still an element of uncertainty around the proposals will leave some software suppliers deciding whether to commit resource to developing their systems or wait and run the risk of not having a product when the changes come in.”
With the new reforms set to be implemented in April 2020, recruitment agencies who deal with the Limited Company contractors are advised to check with their payroll software vendor whether an update will be in place ready for the new changes.