IR35 and off-payroll: Making your workplace environment IR35 friendly

HOW TO MAKE YOUR WORKPLACE ENVIRONMENT "IR35 FRIENDLY"

From April 2021, the rules for engaging individuals through personal service companies are changing. The responsibility for determining whether the off-payroll working rules apply will move to the end client receiving the individual’s services.

Having a thorough understanding of IR35 legislation will enable you to recruit and retain the best contractors, particularly if you are supportive of their need to have some elements of their contract amended, or help them provide evidence, should it be needed.

A common misconception amongst contractors and clients is that having an apparently compliant set of written Terms and Conditions guarantees an outside of IR35 determination. In reality, IR35 revolves around far more than the written contract alone, so working practices must be a factored as a significant consideration.

HOW TO MAKE YOUR BUSINESS “IR35 COMPLIANT”

Below are some practical steps you should consider taking in order to make your working practices with contractors more IR35 compliant: 

• • Do not pay for or supply equipment for contractors. Where possible insist that contractors use their own equipment – laptops, phones etc.
• • If additional training or qualifications are required, insist that the contractor funds this themselves
• • Do not invite contractors to companywide events e.g. Christmas parties.
• • Do not set contractors up with email using the company domain
• • Do not allocate contractors with a staff parking space
• • Do not specify start/end or break times (The contractor can work regular hours for the convenience of and out of professional courtesy for their client, but does not have to)
• • Allow flexibility for remote working where possible
• • Do not provide company branded accessories to contractors– e.g. polo shirts, business cards
• • Do not allow the contractor to use subsidised staff facilities such as canteens and gyms
• • Always introduce a contractor to suppliers, end customers, and/or external third parties as an independent contractor. Similarly, ensure they are named as a contractor on any external emails and/or communications
• • Ensure any verbal notice of days off given by a contractor is also provided via email – you may want to provide a template for contractors to ensure the wording is ‘IR35 friendly’
• • Be proactive; research, plan, prepare and act now for IR35 changes will help you to reduce your risk and potential exposure to HMRC

ACTIONS YOU NEED TO TAKE:

Steps you should take to ensure you are fully prepared ahead of the legislative changes that come into effect in April 2012 include:

AUDIT YOUR RECRUITMENT AGENCY SUPPLIERS:

• Are they financially sound?
  
• Are they profitable?
• How long they been established? This is very important as should there be a problem you don’t want to end up footing the bill. 

REVIEW ANY DIRECT CONTRACTOR ENGAGEMENTS

 Contractors will have to be assessed to determine their IR35 status every 6 months, so do not engage contractors directly unless you have the time and resource to handle constant IR35 reviews and re-evaluations. Determining contractor status will be an ongoing, complex, and time-consuming process; it will not be a one-off exercise. Engaging a reputable, quality recruitment agency will probably be more cost effective and save you from incurring significant costs in the long run.

ENGAGING CONTRACTORS DIRECTLY IS NOT RECOMMENDED.

COMMUNICATE

Make sure to communicate the process and steps you are taking, as well as the end decisions you make to all parties involved to avoid miscommunication or misinformation.

REVIEW ALL CONTRACTOR AND THIRD-PARTY AGENCY CONTRACTS.

• Review all contracts from third-party recruitment agencies to ensure all engagements are IR35 compliant
• Update all policies, engagement and contractor contracts to be fully IR35 compliant
• Use expert advice and guidelines to demonstrate a 'reasonable care' approach

HOW WE CAN HELP YOU

Amoria Bond has partnered with Kingsbridge Insurance giving you access to the only hybrid IR35 assessment tool on the market. The tool was developed by their Head of Tax, Andy Vessey, who is widely recognised as one of the UK's foremost IR35 experts, having personally defended more than 500 IR35 cases against HMRC. 

Our custom-designed automated process with in-house expert consultancy provides the quickest, most accurate IR35 status result available and delivers:

• Fast turnaround time of IR35 assessment
• Access to better or real-time reporting
• A process that can belong to the end client
• A human assessing status if required
• Interaction with the supply chain and its unique circumstances
• The ability to request a manual review of a given engagement irrespective of the outcome given by the tool 

Our assessment tool gives you:

• Unlimited role-based assessments
• Unlimited individual assessments (inc. SDS)
• Expert review of borderline results
• Downloadable reports and recommendations
• Integrated status disagreement process
• Audit log for your records
• Access to IR35 Protect insurance (underwritten by Zurich Insurance PLC with claims handled by top UK Law Firm DWF)
• Unlimited access to IR35 helpline
• A full assessment of contracts
• Regular tax and legal updates
• Annual review & risk assessment

We will give you all the facts and information from the IR35 assessment completely FREE.

Get in touch with our dedicated IR35 Project Manager Jenny Walsh or email us at bestservice@amoriabond.com