One month to IR35: Why you shouldn’t take a blanket approach

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by Rebekah Valero-Lee on

With mere weeks to go until the new IR35 rules come into play for the private sector, companies are ramping up their efforts to consult with their contractors.

This seismic shift in tax legislation will affect the ways in which companies attract and retain talent, as well as making changes to supply chain relationships and business operations. The number of businesses using agency and contract workers has increased 40 per cent in the last 10 years[1], and for those who rely on them to deliver the majority of their labour, it might be tempting to implement a blanket, one-size-fits-all approach to quickly and efficiently side-track the complexities that IR35 presents.

However, legislation dictates that any private sector business using contractors must take ‘reasonable care’ throughout this process, and those found not doing so are at risk of major repercussions – from both HMRC and their contractor workforce.

 

What the workforce are saying

IR35 is putting a lot of power in contractors’ hands. Recent surveys have highlighted that, moving forwards, half of all contractors (50%) will only take contracts that are outside IR35[2], while our own research has indicated that 40 per cent of contractors who find themselves inside of IR35 will work to negotiate an increase in pay to balance the impact on their income brought about by moving to PAYE.

During the 2017 public sector roll out, those who adopted blanket assessments – deeming entire contractor populations as inside IR35 – lost a proportion of their contractor workforce to competitors. Any blanket approach in the private sector could have the same effect, either in the short term, long term, or both. After all, once IR35 comes into play, contractors need only compare two potential clients and what they will do to ensure they can work outside of IR35, before choosing the best option as their next role.

A shake up in how contractors are engaged, without due care and attention to each contractors’ circumstances, current and previous working conditions and levels of responsibility, will make them feel undervalued. As such, they’re more likely to seek alternative roles, causing serious repercussions for the UK labour market and businesses already tackling labour skills shortages.

 

What HMRC is saying

Currently, contractors engaged via a PSC (personal service company) and operating in the private sector can determine their own IR35 status. From April 2020, this responsibility shifts to the end client. Even businesses that use intermediaries and fee payers, such as Morson International, are accountable for conducting these reviews and must ultimately make the decisions as to whether individuals fall inside or outside of IR35.

HMRC has issued a warning that businesses must demonstrate ‘reasonable care’ throughout the implementation of IR35, insisting that every private sector company produces a status determination summary (SDS) that outlines the case-by-case reasons to deem that individual as inside or outside. For companies with extensive contractual chains, there is a responsibility for SDS’ to be passed to every supplier.

Any client found not to have adopted reasonable care risks the IR35 determination becoming worthless, meaning those found to be ‘blanketing’ could be increasing their chances of a penalty from HMRC.

It is also worth noting that those who do move contractors to PAYE will have to consider the regulatory changes that brings; for example, the Agency Workers Regulations outlines processes on worker equality, pay, hours and holidays.

Final legislation and guidelines on IR35 will be introduced mid-March – eye wateringly close to the IR35 implementation date in April, meaning businesses have very little time to prepare. As such, many are calling for a further review of IR35. But one thing is certain – it is coming and is set to cause a shakeup.

Whether you are a contractor or end client, Morson are here to support you through the legislative changes, contact us at IR35@morson.com to contact our expert IR35 team.

 


Cx Jobs

SHE Specialist Req 330084

Job Title: SHE Specialist Location: Crewe Rate: negotiable depending upon experience Role is inside scope of IR35. Job Purpose: To provide professional health and safety advice and support to Route Services business areas, worksites and functional sites of work to facilitate compliance with legislation. Key Accountabilities: To provide advice and guidance to staff regarding health, safety, environment and assurance matters. To manage and evaluate documentation requirements for health, safety and environment to RS business teams in compliance with the Health, Safety and Environment Management system and legal requirements. To carry out risk based inspections of the function's worksites and locations. To support Line Management in compliance with the Company Accident & Investigation process and assist where required in the collation of evidence. To support Line Management in undertaking risk assessments and health, safety and environment monitoring activities. To support the delivery of the functional audit plan. To provide support to the functional SHE and performance teams in the collation of workforce health, safety and environment data within the corporate management systems processes. To manage the assessment and development of the health, safety and environment aspects of supplier contract documentation where relevant. Evaluate information held in health, safety and environment documentation produced by functional suppliers and provide advice on its applicability and effectiveness. Provide a project management service for health, safety and environment opex work in accordance with company standards and guidelines. Provide safety support to identified meetings on SHE matters with contracting organisations to share and promulgate best practice and lessons learnt. Experience Required: Essential Knowledge of health, safety environment management system and compliance management processes National Examinations Board of Occupational Safety and Health (NEBOSH) National General Certificate in Occupational Health and Safety Understanding of British environmental legal requirements Understanding of British Health and Safety legal requirements Knowledge and experience of railway operations and relevant standards Good risk assessment skills / knowledge Good interpersonal, communication and organisational skills Logical thinker Internal auditor qualification Accident Investigator trained Experience in Sypol- COSHH management system from Alcumus. They will be delivering a piece of work, updating and reviewing COSHH system. Need to have knowledge of COSHH.

Dual Skilled Engineer

Recruiting for Dual Skilled Engineers (Rail/Rolling Stock) to work in Manchester on a long-term contract basis for a leading client in the Rail Industry. Within the team you will ensure that traction and rolling stock are serviced and maintained in a safe, efficient and cost-effective manner whilst constantly seeking to improve quality. Role Description Main tasks of the role Corrective maintenance (Electrical or Mechanical, Coach Repairing & Plumbing) Interior Modifications: Wifi, wiring looms etc Preventative maintenance (Electrical or Mechanical, Coach Repairing & Plumbing) Basic maintenance competency e.g.: side skirt cleans, brake pads, block changes etc. Primary fault finding/reporting Secondary fault finding Depot or fleet specific requirements where required Additional tasks - all team members responsible for general depot duties Taking of fuel meter readings off rail vehicles Depot cleaning/general housekeeping (This will have no impact on Cleaners headcount) Driving company vehicles if certified Train cleaning by exception (This will have no impact on Cleaners headcount) Essential Time served apprenticeship or equivalent with associated technical qualification of City and Guilds in Mechanical and Electrical Engineering or equivalent. Skilled in both mechanical and electrical engineering. Basic MS Office IT skills.

Seasonal Operative - Earlswood

Our client one of the UK's largest charities, who maintain 2,000 miles of historic canals, rivers, docks and reservoirs, are looking to recruit a Seasonal Waterway Operatives , to be based at Earlswood and to cover the local area. This will be a 4-month seasonal contract starting in July till the end of October. The role is available on a 30 hours per week basis. The main duties of the role will be to join existing maintenance teams responsible for the upkeep and conservation of the canal in and around the Earlswood area. The role will cover the local area so the successful candidate must be flexible regarding working location and willing to travel. In addition, the successful candidate will be in regular contact with users of the canal network so excellent Customer Service skills are required Duties: - Assisting lock keepers with lock keeping at busy times, covering gaps in the rota where required. Training will be provided for lock keeping and an internal assessment will be carried when the successful candidate is ready for this. General vegetation maintenance including but not limited to; cutting the grass around the lock flight using a power-driven lawn mower, training will be given for the use of the mower. Strimming grass using powered strimmer. Trimming hedges by hand using hand tools. Edging grass using hand tools Painting of locks, bridges fencing and signs Fencing, signs and posts, small towpath repairs General safety checks of the Destination Litter picking Emptying bins Mopping the floor in the customer service facilities Meeting and greeting visitors in the Welcome station and engaging them with the work of the charity Assisting with and leading activities such as Let's Paint and Let's Pond dip. A full driving license is required for the position.

Engagement Manager

A leading client in the Transportation Industry is recruiting for an Engagement Manager to work on a contract basis, based at their offices in Birmingham. Role is inside scope of IR35. JOB PURPOSE The Engagement Manager develops and delivers the plan for engaging with the affected communities and their representatives and creates strong stakeholder relationships in order to achieve organisational objectives. ACCOUNTABILITIES Develop and implement regional and local plans for community engagement to ensure there is public awareness of: the project; its benefits and local impacts; the support the Engagement Manager provides to affected communities; and how they can get involved in the development of the railway. Engage with local representative groups to identify appropriate channels for engagement, particularly with those who are vulnerable or require additional support. Maintain internal and external stakeholder relationships, apprising Ministers and senior client employees and civil servants of progress. Work with community stakeholders and local representatives to minimise objections. Through engagement, gather relevant information to ensure the organisation understands how the proposals impact on local communities. Represent the client organisation in the region, including with local elected representatives and business groups, and act as the spokesperson in local and regional media. Ensure all engagement is recorded in line with organisational policies. Ensure appropriate processes are followed to promote knowledge and understanding of community views and concerns within the organisation. KNOWLEDGE, SKILLS, EXPERIENCE Intermediate experience engaging and working with communities, including in a hostile and complex environment. Demonstrable track record of using strong communication and interpersonal skills to establish and maintain good working relationships with a wide variety of stakeholders, including local communities, business representatives, and elected representatives. Proven ability to develop and deliver a local engagement strategy Strong planning and organisational skills. Experience of presenting a large amount of complex information to a wide range of stakeholders in an appropriate style. Able to operate effectively within a community engagement or consultation forum environment. Demonstrable track record of delivering sensitive - and at times distressing ‐ messages to the individuals and community groups Experience of line managing staff. Experience of working in a large infrastructure project environment is desirable. A local authority background would be useful although but not essential.

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