Many organisations are still facing continuing challenges from the changes to IR35 legislation in the private sector from April 2021 and the administration burden that it has created.
The reform places responsibility on the end user client to determine the status of an off-payroll contract worker as inside or outside of IR35 legislation and apply the appropriate statutory deductions for any role determined as inside or issue a Status Determination Statement for any role deemed Outside of the legislation.
What is IR35?
IR35 legislation was first implemented in 2000 and aims to determine a genuine business relationship from a disguised employee targeting Personal Service Companies (PSCs) – Limited Company Contractors.
These Limited Company Contractors may be working more akin to an employee of the end-client rather than a genuine business to business service provider. The legislation seeks to reclaim any additional PAYE and NI contributions that may have been due should the contractor have been engaged as an employee.
The most recent change transferred responsibility from the contractor to large and medium private sector organisations to determine IR35 status and the “fee-payer” became responsible for unpaid taxes and NICs under debt transfer provisions from 6thApril 2021.
The means that private sector organisations will need to determine whether the off-payroll rules apply to all contract assignments from 6thApril 2021.
How we help you
Recent surveys indicate that those organisations that implemented blanket inside IR35 determinations across their contingent workforce or halted the use of third-party contractors via limited companies and insisted on an umbrella scheme model are now struggling to source contractors within a competitive skills market with critical projects being held up by lack of resource.
Gerrard White can help any organisation looking for guidance to ease the burden of IR35 reform whilst mitigating risk by implementing market leading processes and compliance strategies with access to expert knowledge and support.