ENSURE IR35 COMPLIANCE

As of April 2022, HMRC's IR35 grace period ended.

Organisations are now fully liable and responsible for any inaccuracies in their determinations. Our IR35 Health Check MOT service supports businesses to avoid the financial and reputational risks associated with not meeting IR35 regulations.

When the IR35 reform was enforced in April 2021, HMRC announced it would offer organisations a grace period to ensure their determinations were completed accurately. As of April 2022, the aforementioned grace period ended, meaning organisations are now fully liable and responsible for any inaccuracies in their determinations and could be subjected to HMRC investigation at any time.

​Our IR35 Health Check MOT service supports businesses with contingent workforces of all sizes to ensure their IR35 solution and/or determinations are correct and secure to avoid the financial and reputational risks associated with not meeting IR35 regulations. Our service is fully insured against the outcome, backed by employment law experts.

Image 2021 07 21 T10 09 09
IR35 LEGISLATION RECAP

After a 12-month delay IR35 ‘off-payroll’ legislation came into play on 6 April 2021

IR35 was introduced to ensure that individuals operating via a personal service company (PSC) were paying the correct levels of income tax and national insurance contributions, relative to their employment status.

WHAT DID IR35 CHANGE

From April 6th 2021, the responsibility for determining the correct IR35 status of contractors switched from the individual contractor to the end client.  Businesses must ensure they are delivering correct determinations taking reasonable care in doing so.

HOW DID THIS AFFECT ORGANISATIONS

Organisations were required to undertake a full review of their workforce to correctly define the IR35 status of their entire LTD contractor population to ensure compliance with Government legislation.

INSIDE OR OUTSIDE

Where an assignment is determined ‘inside’ IR35, relevant tax and national insurance deductions must be made from the contractor’s pay at source by the fee payer. Any assignment determined ‘outside’ IR35 indicates a true business relationship and contractors can continue to manage their own tax affairs.

WHAT ARE THE KEY CONSIDERATIONS?

The end client is responsible for determining whether a contractor is ‘inside’ or ‘outside’ of IR35. Organisations must ensure that their business is delivering correct determinations or risk significant financial implications for incorrect determinations.

THE CHALLENGE OF IN-HOUSE ASSESSMENT

The challenges of conducting an IR35 assessment in-house, without the support of a third-party advocate include:

  • The need to allocate dedicated resources to assess each contractor individually.

  • The need to roll out new policies and procedures to manage the assessment process, in addition to hiring manager training.

  • Changing mindsets as to how contractors are treated in relation to employees. This covers the possible removal of benefits, such as staff parking and training, and issuing new hiring manager guidelines on how to engage with contractors in an evolving landscape.

  • The need to police your supply chain, as all suppliers have to carry out adequate assessments of their own.

  • The risk of significant financial penalties, as well as potential legal and reputational damage if assessments are found to have been completed inaccurately.

By using our IR35 Health Check MOT service, businesses that are currently unsure of whether their assessments are valid can avoid the financial and reputational risks associated with not meeting IR35 regulations.

Image 2021 07 21 T10 09 09
THE SERVICE

Our service empowers organisations to make more accurate and considered assessments.

In conjunction with our approved PSL of IR35 expert suppliers who are all FCSA regulated, our service ensures contractors are assessed against all factors concerned with IR35 and more importantly is fully insurable against the outcome, protecting all parties in the supply chain.

Our service includes:

  • A review of tools used during determinations of incumbent contractors

  • A review of existing SDS determinations

  • A review of users’ ‘business as usual’ processes and procedures

  • Agency Worker Regulations (AWR) considerations

  • Analysis of policies and procedures to identify any outstanding risks and potential for improvements to operations

  • Use of Morson’s market intelligence tools and approved PSL of suppliers who are all FCSA regulated

Image 2021 07 21 T10 09 09
Image 2021 07 21 T10 09 09
GET IN TOUCH

Move forward in line with regulation

Whether your contractor workforce is vast or tiny, we want to help you avoid the potential mistakes that might be incurred by your business’ individual practices, and offer you total confidence that despite IR35, there won’t be any hurdles in being able to access and utilise contingent labour.