PROVIDE FOR IR35
With April fast approaching, we asked the leading providers for their best advice to help you prepare.
Del Williams, Sales Director, JSA Group:
While the upcoming IR35 (off-payroll) reforms may feel like a compliance headache which open your agency up to financial and reputational risks – it doesn’t have to be this way.
With the help of an expert IR35 partner you can approach the reforms calmly and efficiently, allowing you to remain focused on placing the right applicant in every role during a time of mounting pressure in the recruitment industry.
By finding the right IR35 partner, your agency can receive guidance on how to manage the reforms, gain access to a reliable and insurable assessment tool, and help contractors into the correct working solution – providing them with expert ongoing support and a carefully considered PSL.
You’ll have time to forge better relationships with your end hirers, contacting them to discuss the implementation of an accurate and efficient assessment process and recommending your preferred assessment tool where necessary. You’ll also have the outsourced expertise to help you communicate with your contractors and help them amend their contracts where appropriate so they can work compliantly ‘outside’ IR35. This will help you establish methods of clear communication across the supply chain – vital for mitigating risk and proving your due diligence.
If you need help with any aspect of IR35, the team of compliance experts at JSA Group are here to help. They can provide you with a complete solution: from planning, to implementation, and ongoing support.
Andy Robinson, Business Development Director, Kingsbridge:
“While early preparation is certainly key when it comes to the IR35 roll out in 2021, one of our key tips for recruiters as the extended deadline nears is to use this time to ensure the right balance of automation and human intervention is being used in determinations. We’ve seen over the last year that some fully automated tools can have flaws – including HMRC’s own CEST tool – but, understandably, relying solely on people to make determinations isn’t a viable option. However, a balanced mix of technology and manual intervention for any indeterminate results is, in our view, the best approach. In fact, in our recent IR35 survey, 68% of recruiters indicated that they are taking this approach.”
“It’s also crucial that recruiters ensure their voice is heard when it comes to what determination tools are being used. Prior to the original deadline, many clients drove the use of HMRC’s CEST tool. However, as the fee-payer it is the recruiters who shoulder the potential tax risk of an IR35 status determination later being challenged by HMRC. As such, the importance of keeping clients happy needs to be balanced against recruiters implementing processes and tools that protect their balance sheets and minimise their risks, including the use of insurance.”
Julian Ball, Legal Director, PayStream:
Work back from 5 April and put in place a plan to ensure:
Your clients know that you need an SDS in time to deliver the result (and the options available) to the contractors. If the worker is inside IR35 you will need to explain the options available (PAYE, umbrella or deemed payment) and put in place new contracts once the worker has made up their mind. This takes time.
For “inside IR35” contractors you have a solution ready. Agree a process with an accredited umbrella company to ensure that contractors have signed all necessary paperwork and are ready to be paid by the umbrella company for work carried out after 5 April. Agree a reporting process with the umbrella company so you know in advance who has signed up and who you need to chase. Ensure the umbrella company has capacity to sign up the workers quickly.
The client makes an informed decision on the SDS. You may have knowledge that the client does not, which may help to reach an outside IR35 decision. However we saw in 2019 that getting involved in the decision making process can become time consuming for you and may ultimately delay the process.
SDSs for groups of workers doing the same job are consistent and issued at the same time. Workers will obviously talk to each other and compare results which can cause problems if there are differences. If workers are involved in completing the review they will learn from other SDSs and potentially tailor their answers to get the right result.
John Hetherington, UK Sales Manager, Practical Software:
IR35 is a big issue for recruiters, clients and workers alike. At the moment, it’s the contractor’s responsibility for determining whether they are inside or outside of IR35 in the private sector. But, come April 2021 this will change to responsibility laying with the end client; in line with current public sector legislation.
The Government has provided the CEST tool that (allegedly) tests the Supervision, Direction, and Control to see if you’re seen as an employee. The results from this then have to be passed to the recruiter. It’s important to remember that this is per assignment so every time a contractor changes their role or assignment then IR35 status needs to be redetermined. For agencies that deal with shorter term contracts, relief or bank workers; this can create quite a lot of paperwork for agencies to manage.
Cloud based systems are a great place to start in helping recruiters manage IR35 for their clients and candidates, and there are a lot of functions that help stay on top of these responsibilities. A good system should have a linked storage area for holding documentary evidence, auto generated reminder notifications to both the Recruiter and the End Client, and also an overdue counter as a visual aid to make sure that you don’t miss anything.
It goes without saying that there’s a lot to be kept on top of but with the benefits of an integrated back office solution, you can work to keep you, your clients, and your contractors safe.