The start of November marks just 6 months to go until IR35 legislation comes into play in the private sector. The Autumn Budget 2019 was originally scheduled for this month, however, the decision was taken at the end of October to scrap the budget due to a further Brexit delay and the upcoming General Election in December.
Where does the budget cancellation leave IR35?
We recommend that private sector organisations continue to prepare for the IR35 reform, despite the budget cancellation. If implementation of the legislation is rushed, it may be damaging for many private sector contractors. Therefore, it is important that end-clients continue preparing for the IR35 reform by reviewing working practices and getting to grips with their contractor landscape over the coming months. Companies who act now will reap the rewards come April 2020.
So, what actions should your business be taking in November to prepare?
Our countdown calendar below shows what you should be considering and when to prepare for the upcoming changes toIR35legislation.
OCTOBER- Your first step will be to conduct an internal review of your contractor population. This will mean asking your payroll and HR teams for details of contractor workers, your supply chain and/or your recruitment managed service partner for this information. Once collated you’ll understand the potential number of affected contractors.
If you have a complex supply chain and/or a large number of contractors, you directly payroll this is an excellent opportunity to explore how partnering with a recruitment managed service provider could help to mitigate your risk.
OCTOBER - NOVEMBER-Now that you understand your contractor population, you need to complete indicative assessments of your contractor workforce.
From April 2020, you as the end client are responsible for confirming theIR35status of an individual.
AtMorsonwe can support you with the assessment process for roles via our approved partners Champion Contractors andWeightmansLLP (contact us at IR35@morson.comfor more information). In our experience, the best way to develop the initial assessment is to complete a sample of mock employment status indicator (ESI) forms. To maximise the validity of this sample we recommend speaking to your colleagues who utilise contractors to fully understand the roles/disciplines. After completing these sample ESIs these can then be submitted to Weightmans LLP for review.
NOVEMBER-As part of this review and initial assessment process it is recommended that you review and amend all relevant contractual terms used throughout your supply chain.
In addition, you must ensure that you inform your contractors of your intended assessment process. Keeping them updated and engaged in the process will pay dividends when issuing individual determinations to your contractor population (December to January).
How Morson can help you prepare for IR35?
With only months to go we are urging business to start your preparations now. Engage us today and we can offer advice and solutions to help mitigate risk at all stages up until and beyond April 2020.
At Morson we can support you with the assessment process for roles via our approved partners Champion Contractors and Weightmans LLP.
Our in-house experts can provide advice on the best team for you based on our own experience if required. We’ve also developed a handy IR35 process checklist which will help you design a project and risk mitigation plan independently or with the expert support of our compliance team.
Contact IR35@morson.com to get your copy.
We’ll also be able to consolidate your contractor worker engagement process – simplifying and controlling the supply chain spend and compliance adherence whilst removing the financial and legislative burden associated with directly payrolling contractors. This will give you full visibility of contractor use and through accurate data speed up the IR35 assessment process.
"Wolseley IT representatives were invited to attend a presentation by Morson to help clarify our understanding of how the new IR35 legislation will be implemented from April 2020. We, as the client, will need to demonstrate that reasonable care has been taken when implementing our employment status process, as there could be the potential for tax liability reverting back to us.
Experts from Champion Contractors, Morson and Weightmans' helped simplify this legislation for us as the end client. We are now working through their suggested process checklist to identify whether our contractors are inside or outside of IR35, so we will be well prepared in advance of the new tax year." Wolseley IT.