IR35: Off Payroll Reforms
The latest consultation for the IR35 off-payroll working reforms is underway and the recent coverage has increased awareness of the challenges that companies using contractors will face should the legislation come into force in 12 months time. The proposed reforms will fundamentally change the way that companies work with contractors and affect the incumbent and future contractor populations.
Under the proposed reforms, it will no longer be contractors who determine IR35 status but the end user companies who hire them. Yes, you read this right! As the end user, your company will use an HMRC online tool called CEST (check your employment status), for each contractor you hire.
Despite coming into force in y2000, IR35 in its current form is often not fully understood by end users of contractors and we are regularly asked for assistance to help companies understand the legislation and considerations. As the determination for IR35 status shifts from the contractors to the end company users, it is essential that the business has full visibility of the contingent worker population, understands the legislation and develops processes and policies to ensure compliance.
We are therefore proactively talking to and working with our customers to prepare for the change. As an MSP, our role is to provide a comprehensive framework for managing contingent labour and so we are active in ensuring that our customers are prepared.
Our draft project plans are sizeable with key requirements to communicate and educate, review processes, review policies, review contracts, audit the incumbent population and supply chain to deliver a compliant, robust model for the future.
If you haven’t already, I recommend spending 10 minutes completing the CEST tool online to see the kind of questions that your organisation will have to complete for each of your contractors. This is a HMRC tool and you don’t need to register any details. The tool will be updated but forms the platform for the future determinations in the private sector.
If you would like to discuss your approach further or how we may help you get control of your contingent worker population, please get in touch.
Please find the link for the CEST tool below: