The IR35 countdown is on: top 5 IR35 myths debunked

W1siziisijiwmjavmdivmdqvmtevmzcvntmvnty5l3dvbwfulxdlyxjpbmctymx1zs1kzw5pbs1qywnrzxqtchv0dgluzy1ozxitcmlnahqtyxjtlw9ulwhlci0xmdgxnjczlmpwzyjdlfsiccisinrodw1iiiwintqwedmwmcmixv0
author profile picture

by Rebekah Valero-Lee on

IR35 continues to dominate the headlines as medium and large private sector companies work to get their contractor populations and working practices in order ahead of the 6th April deadline.

The upcoming reforms will create a seismic shift in the way we attract and retain talent in the UK, whilst delivering widespread changes to business operations and supply chain relationships.

Despite the constant chatter, confusion is rife over the looming IR35 reforms, with our recent blog revealing how more than half (54%) of the 1,000 contractors surveyed said that they were still unaware of the upcoming changes to off-payroll working.

To separate fact from fiction, here we debunk the five most commonly cited IR35 myths.

 

  1. We are responsible as the clients’ agency for determining the IR35 status of their contractor workforce

Currently, contractors engaged via a PSC (Personal Service Company) and operating in the private sector can determine their IR35 status, but from April 2020 this responsibility shifts to the end client. There’s a misconception amongst some businesses that the labour provider, such as Morson International, is accountable for determining the IR35 status of their clients’ workforce, yet it’s down to the end client to conduct these reviews and ultimately make these decisions as to whether individuals fall inside or outside.

IR35 legislation isn’t one-size-fits-all, meaning private sector businesses must demonstrate ‘reasonable care’ throughout this process. Following the lessons learnt from the public sector roll-out – which saw many organisations adopt a cautious approach and deem entire contractor populations as inside of IR35 – HMRC has insisted that every private sector company produces a status determination summary (SDS) that outlines the reasons to deem that individual as inside or outside.

Anyone 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.

These same organisations also risk losing talent to their competitors who may have deployed the necessary and accurate steps towards IR35 determination and deemed these same contractors to fall outside of the legislation.

 

  1. We are responsible for communicating IR35 decisions with individual contractors and managing the appeals process

As with determining IR35 status, it is also the responsibility of the end client to communicate these decisions to every party throughout the contractual chain, together with managing the appeals process.

Legally, every contractor has the right to appeal the decision of the end client, to which the client then has 45 days to respond. Excellent communication between all parties within the contractual chain is paramount, ensuring those involved can openly express their views without fear of prejudice.

Adopting the same reasonable care as described above, will able end clients to address any disagreements and evidence the reasons behind their employment status decisions.

Yet some sectors, such as construction, lack full transparency over their supply base, which poses the risk of being caught out when required to supply the SDS document to every party within this chain.

And whilst the end client has the ultimate decision, the power remains in contractors’ hands. From April 2020, contractors need only compare two clients and choose the working relationship that will do its best to ensure they operate outside of IR35. Meanwhile, those willing to move to PAYE or Umbrella may also demand increased pay rates and additional benefits to compensate against any financial losses.

 

  1. The changes won’t be implemented into the private sector come April 2020 and a delay will shortly be announced

The uncertainty caused by the Brexit narrative, the deadlock in Westminster, the decision to review IR35 legislation and the Budget delays has caused further confusion, with some clients and contractors perceiving this to be a delay to the reforms.

This is most certainly not the case, with the new tax regime needing to remain top of the private sector agenda. Our recent blog here details the IR35 review and the Treasury is still very much pressing ahead with its original April deadline.

The countdown to comply is therefore on, with private sector organisations having just weeks left to get their houses in order and deliver risk-averse talent strategies that ultimately protect their operations and finances.

 

  1. HMRC’s CEST tool is the best option to correctly determine IR35 status    

The risks posed by HMRC’s Check Employment Status for Tax tool (CEST) have been widely highlighted, with numerous public sector companies even receiving fines from the Treasury as a result of incorrect determinations that were delivered by CEST.

To ensure our private sector clients, and other private sector businesses, don’t fall foul of the same pitfalls, we have developed our independent review process. Created in conjunction with our IR35 expert partners, the process ensures each organisation takes the necessary steps to accurately test whether those individuals engaged through PSCs fall inside or outside.

The flaws surrounding CEST are often rooted in the tool’s simplicity. It fails to align with full case law, with ‘Mutuality of Obligation’ – a key determiner of IR35 status – not even being considered.

Despite HMRC promising to roll out an updated version, the criticism surrounding its use remains rife, with many stating how the questions fail to address or understand the nuances that are present in client and worker relationships.

 

  1. I can simply create ‘IR35 friendly contracts’ to give outside determinations

A common industry misconception is that having an ‘IR35 friendly contract’ that details a specific set of terms and conditions will ensure you fall outside of scope. Yet IR35 status is determined by your working conditions rather than the written contract. Those relationships that don’t reflect the contractual clauses risk their determinations being dismissed by HMRC.

A shift in the responsibility from contractor to end client will work to eradicate this myth, with end clients able to answer questions specific to their organisation’s ways of working; in what should then deliver a correct IR35 determination.  

Whatever your sector, it’s crucial that you seek support and guidance from a team of compliance experts to provide a holistic approach to IR35 and demonstrate reasonable care throughout the employment status review process.

 

For more information and to find out how the Morson Group can support you, contact our IR35 compliance experts today at IR35@morson.com or visit our IR35 portal.

 


Cx Jobs

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.

Handyman

Morson International require an experienced Handyman for an office block in Cardiff. Starting immediately, covering a month of leave as a Handyman within a call centre environment. On offer: Immediate start Weekly payments to - LTD, Umbrella or PAYE 4 weeks contracts with the potential to extend Parking on site Duties include, but not limited to: Opening & closing building Fixing door handles Moving furniture Rubbish If you have experience as a Handyman on commercial buildings or schools, please apply online today or call Quade on 07714 541 325.

Senior Technical Rail Officer

Job Title: Senior Technical Rail Officer Job Type: Fixed Term Industry Sector: Transport and Rail Salary: £40,413.00 Per Annum - £50,029.00 Per Annum Benefits: 27 days holiday per annum, Local Government Pension Scheme, Flexible working Location: Leeds Recruiting for a Senior Technical Rail Officer to: Act as the primary specialist in a role providing critical rail service technical support to the Management Team, Board and Partners in relation to analysing, selecting, contracting and implementing the passenger-service solution in its interim and final outputs, and in ensuring it is aligned to other rail enhancement programmes across the North of England. You will be expected to provide impactful strategic and policy input by building strong relationships, internally and externally and be able to influence, shape, challenge and contribute to the development, delivery and input into rail enhancement programmes in the north of England. With good operational and commercial understanding, you will realise the impacts on possession plans and revenue for changes to train plans and will be able to identify, report on and manage risks or issues arising from a train service prospective. As a confident communicator at senior level you will have the ability to influence a wide range of stakeholders, partners and senior colleagues and the confidence to represent the in a range of forums at regional level. Candidates must possess a relevant degree or other post graduate qualification, or the relevant experience gained through experience, in addition to a professional qualifications. Experience * Relevant degree or other specialist post-graduate qualification or the equivalent level reached through experience. * Professional qualification, chartered status or equivalent experience. * Significant experience and detailed knowledge of rolling stock, train planning and timetabling matters relating to service provisions including train length, frequency, capacity, passenger needs and expectations. * Significant experience and detailed knowledge of operational issues such as traincrew training, resourcing and train stabling and depot requirements, sufficient to support business case development for both short term disruption planning and intermediate and end states of a similar programmes * Commercial understanding regarding possession plans and revenue impacts for changes to train plans. * Experience within programmes of identifying, reporting and managing relevant risks or issues developing from a train service perspective. * Significant experience of co-ordinating a range of cross cutting, complex initiatives into a cohesive output. * Significant experience of planning and organising own work and the work of others (internal or external) over the medium term. * A confident communicator at a senior level who is able to influence a wide range of stakeholders, partners and senior colleagues. * Considerable experience of managing complex budgets and undertaking accurate monthly project and programme reporting. * Reputation, ability and confidence to represent in public, professional and stakeholder forums at a regional level. * Requires significant experience of leading the development of business cases and inputting into the development of transport strategies for a defined area. * Acts as the lead professional and will be seen as primary specialist (subject matter expert). * Requires sufficient strategic and technical understanding to act as the primary source of expertise.

Traction & Rolling Stock Installation Design Engineer

Job Title: Traction & Rolling Stock Installation Design Engineer (Electrical or Mechanical) Job Type: Contract Location: Derby Rate: Negotiable depending upon experience Recruiting for two Traction and Rolling Stock Installation Design Engineer's, one with an Electrical bias and the other Mechanical. Both positions are working on a contract basis for a leading client in the Rail Industry based in Derby working on a long-term contract basis. Role Definition Working as part of a close-knit team the Installation Design Engineer will have an area of specialism and a wide knowledge of our industry especially regarding retrofitting train control systems. The Installation Design Engineer will work within the on-board train fitment design team to ensure the installation design engineering requirements on the project are correctly captured and delivered. Essential: * In depth practical knowledge and experience of designing the retro-fitment installation of train systems, in particular ETCS, TPWS, AWS, GSM-R, Wi-Fi, CCTV and DAS. * The application design of standard hardware in an on-train environment and documentation of the application design for train carried systems. * Ability to understand and capture installation design requirements (specifications, scenarios, rules, etc.) relating to the subsystem. * Previous experience of using Solid Edge 3D CAD system. * The ability to specify cables, connectors, terminals, conduits etc to be used in the installation design. * The ability to produce conduit fill ratio calculations. * Experience of leading/participating in vehicle surveys to ensure sufficient information is gathered to facilitate the production of installation designs. * Awareness of depot procedures and site safety. * An understanding of the approvals process required to modify a train and bring it back into service. * Read and review requirements, creating written comments and attending reviews as required. * Review engineering data for completeness and consistency. * Review product installation designs to ensure adherence to guidelines and installation constraints * Previous experience in application designs for maintenance. * Previous experience in liaising with subcontractors throughout the whole project lifecycle. * Experience of working to industry quality and safety standards. Desirable: * Specific knowledge of implementing ETCS and/or CBTC systems and GSM-R systems * Proven track record in working in major Sub-contract environments * Previous experience of using MicroStation CAD system * Previous experience of using AutoCAD CAD system

W1siziisijiwmjavmduvmtevmdgvmjmvntcvmjcyl2f1c3rpbi1kaxn0zwwtdmfft3bwodzrzletdw5zcgxhc2guanbnil0swyjwiiwidgh1bwiilci1odv4ndq4iyjdxq

Advertisement