What are the Implications for Agencies, End Clients, Contractors?
Relief, Frustration and Uncertainty
Whilst the delay maybe welcome news to Agencies, End clients and Contractors, many businesses had already implemented their IR35 strategy. Those that hadn’t have been given some breathing space to prepare for April 2021
There is much debate around the reason for the U turn, but it is safe to say delay will have dealt a blow to HMRC and HMT; however the only real reason for the delay is recent unprecedented events.
What Simple Steps Can Engagers Take ?
- Consider the overall engagement of an Outside IR35 contractor
- Treat them as a business and not a pseudo employee
- Review working practices to ensure they are a true reflection of the contractual agreement
- Remove ‘Supervision Direction or Control’
- Substitution not a Replacement
- Work should not be by time and measurement, but evaluated by project milestones, deliverables and project cost
Are there any risks associated with the delay?
- If you have already conducted assessments and determined a contractor as inside IR35 ( PAYE & NICs deducted at source) you cannot simply revert to paying them Outside IR35. If you do there could be tax and non compliance issues as there is a record of this assessment and it would be used in any HMRC enquiry
- Contracts which have been terminated should not be simply reinstated, as there are associated risks
- Where contractors have been made to work via an umbrella company, and have become employees , to simply remove them and start paying them outside IR35 could open your company up to additional risk and penalties
- The PSC would become liable again for any tax loss or non-compliance, but inevitably draw HMRC’s attention by switching from Outside, then Inside IR35 to Umbrella, increasing the risk of a tax investigation
How Can We Help?
We offer expert guidance with practical steps on how to create and implement the IR35 processes. If you haven’t taken legal advice, we give you access to ours.
Practical advice without the need to over complicate
Our own IR35 assessment tool to help produce an SDS (Statement Determination Statements)
Qualified IR35 consultants to review your working practices and roles offered to contractors with Limited company’s
Provide training for your teams to ensure that contractors are correctly engaged
Deliver robust and alternative solutions if the contractor is assessed inside IR35
Offer an outsourced IR35 compliance service which allows you to let us take the risk on your behalf and act as the fee payer
Taking on your liability to mitigate the risks when you outsource your IR35 compliance to Pendragon
We do not provide accountancy services or Ltd company set ups, so we are completely focused on the compliance.
Call one of the team to book your free consultation on 01992 267 067 or email email@example.com