Everything you need to nail the final sprint to April 6th
Join Workr Compliance and STR Group at 10am on Thursday 11th March to get essential clarity on compliance, insurance and what BAU looks like post April…
Hosted by Andrew Webster, Founder and Director at Workr Compliance, who will be joined by David James, Engineering Programme Director at STR Group and former IR35 Project Lead at WORLEY, this session will provide actionable insights on:
Fee Payers’ opinions on IR35 Insurance; who takes out the policy, who pays for it and possible MSC risk
Planning for IR35 BAU; what should happen from 6th April 2021
With confusion still evident in the marketplace, Andrew and David will provide clarity to engagers (end clients) on three key areas of IR35: HMRC’s soft landing, insurance and preparing for BAU. They will provide their experience-led advice and best-in-class guidance to engagers going through the latter stages of preparing for 6th April – and indeed beyond. The session will explore the key considerations including what should be done, by when and with whom and provide you with an opportunity to have any burning questions you may have answered.
With only 16 working days left before the Reform can you afford to miss out?
NOTE: If you are cannot make it on the day, you can still register to receive a free recording after the session.
Workr Compliance and Markel Tax will be hosting an exclusive webinar, limited to 100 guests on Thursday 18th February from 10am to 11am.
The session will provide specialist insights on:
Understanding where the risk/liability lies
Anticipated enforcement; practical steps to remain compliant
What is IR35 Tax Investigation and Loss insurance and, why is it needed in the contractor recruitment supply chain?
Andrew Webster, Founder & Director at Workr Compliance, will be moderating the discussion and joined by a leading IR35 and tax insurance expert:
Paul Mason, Head of Tax Partnerships at Markel Tax, will be providing a thorough overview of IR35 Tax Investigation and Loss insurance and the importance of having it in the supply chain.
The majority of Engagers are getting prepared for 6th April legislative changes and, indeed so are Fee Payers. Whilst preparations continue, a much anticipated discussion on indemnification of liability has raised its head over recent months. Workr Compliance and Markel Tax are aware that there is choice in the market for such insurance products, but why not hear first hand of ‘the whys and wherefores’ of obtaining it, in that it is not merely a tick box exercise but evidence of longer term compliance.
Lastly, there is much debate in the market as to ‘who will pay for the insurance?’ or indeed ‘is it actually needed?’ – have a platform to share your views amongst your peers on this subject matter.
Missed it? View the webinar recording
Webinar Recording – Demystifying off payroll working for the entire contractual chain (whilst protecting your interests)
Workr Compliance and STR Group will be hosting an exclusive webinar, limited to 100 guests, on Thursday 4th February, 4pm – 5pm.
The session will provide specialist insights on:
Preparing for 6th April 2021; at what stage of project delivery should you be at with 47 working days to legislative change
What are the key components of ‘best in class’ IR35 project and?
Identification of probable ‘bottlenecks’ to project delivery on time and, what action can be taken
Andrew Webster, Director at Workr Compliance, will be moderating the discussion and joined by leading compliance, project management, and employment status tax experts:
David James, former IR35 Project Director at WORLEY and now Engineering Programme Director at STR Group.
Sue Ollerenshaw, Director, Employment Tax Expert
The Private Sector is being told by many stakeholders to ‘prepare’, whilst it is sensible advice, it is potentially not the detailed advice from experience that is being gleaned and, that such detailed advice based on key learnings of delivery would be of greater value as we get closer each day to the 6th April!
The open discussion session will provide a platform for end client attendees to hear, first hand, the genuine challenges likely to be faced of delivering a IR35 project that meets HMRC Reasonable Care’ whilst not affecting day to day operational delivery.
We have a limited number of places available. RSVP by completing the fields to secure your place.
IR35 changes – Maintaining a compliant supply chain
With the IR35 Reforms due to take effect in the UK private sector on the 6th April 2021, there has been a lot of speculation about the increase in the use of umbrella companies.
The decision to defer the IR35 changes earlier this year came as a massive relief to many organisations within the temporary labour supply chain. In our article, IR35 – deferred, not defunct! Workr Group outlined how this relief is likely to be shortlived with the reforms almost certain to take effect in 2021.
However, the deferral of the IR35 changes did give a clear indication of the strategies that contract users are likely to take in response.
Responses made in preparation for the original April 2020 IR35 changes indicated that many large scale engagers took an ultra-cautious, although potentially misguided approach.
Policy changes regarding the utilisation of contractors supplying their services via an intermediary (personal services company or Limited Company) or blanket statements determining all contractors as being caught by IR35, appeared prominent. Our previous article IR35 Changes – Blanket Statements Uncovered outlined some of the risks involved in these approaches.
As a result, the Umbrella company solution has been promoted as an alternative by those suppliers under pressure to retain their temporary labour business.
What is an Umbrella Company?
An Umbrella Company will employ a contractor in a similar way to any other employer. The contractor is a permanent employee engaged in working on a number of assignments. They are provided with a Contract of Employment under the Employment Rights Act 1996, granting full employment rights.
The umbrella company contracts with the client or agency and takes care of all the administration matters.
Umbrella companies are used by many contractors because they provide a simple, cost-effective and flexible operating structure.
All income is paid out through the PAYE tax system.
The umbrella will take care of all the administration, tax and payroll work for the contractor — providing insurances to cover the contractor working on an assignment.
The IR35 legislation does not apply to contractors engaged through an umbrella company, making the option more appealing to engagers.
How does the umbrella solution impact engagers?
The removal of the IR35 legislation, and it’s associated responsibilities, is likely to be an attractive proposition for engagers.
However, engagers presented with an umbrella solution should seriously consider the consequences before committing.
Whilst the umbrella solution appears to be the perfect diversion around the IR35 roadblock, there are still risks and responsibilities that the engager cannot relinquish.
Any engager making mass IR35 determinations or blanket statements, or enforcing an umbrella only policy, risk alienating themselves from the talent pool of contractors that legitimately provide their services through a personal service company.
Attracting and retaining top talent is already tricky enough, but contractors are far more likely to be attracted to engagers that offer a fair and considered IR35 determination process.
What are the risks to engagers of utilising an umbrella solution?
First and foremost, the engager still has a responsibility for ensuring that its temporary labour supply chain operates compliantly.
The engager must demonstrate that it has taken reasonable care in the construction and management of its supply chain. Considering reasonable practical ability and competence, this includes ensuring that tax and national insurances are administered and paid correctly.
Failure to demonstrate reasonable care could result in HMRC transferring debts up the supply chain to engagers where taxes are unpaid.
Whilst the umbrella solution is well established, and many providers have operated it compliantly for many years, there are still regular examples of umbrella models that represent tax avoidance schemes in the eyes of HMRC.
Engagers must be confident that such uncompliant models are not being practised and utilised within their supply chains as the financial and reputational risks could be substantial.
What should engagers look out for with umbrella solutions?
A compliant umbrella company should operate in line with UK tax law with contractors becoming employees and income being treated as employment income and taxed via the PAYE scheme. It will provide the contractor with statutory holiday and sick pay entitlements and is also likely to offer additional benefits such as healthcare and insurances.
Engagers should also look out for accreditations to bodies such as the Freelancer and Contractor Services Association (FCSA) – fcsa.org.uk, a self-governing body for umbrella companies that conducts regular and robust audits of its members, Workr Group included.
Umbrella schemes operated by providers with FCSA accreditation are assessed and investigated thoroughly to ensure compliance.
However, there are hundreds of providers in the umbrella marketplace, many operating without governance or accreditation. Subsequently, there have been many examples previously of schemes advertised as umbrella arrangement that, once inspected more closely, have elaborate payment arrangements that do not conform with UK tax law.
In particular, a more recent example has been exposed and labelled as the Mini Umbrella Company or MUC. In this case, hundreds of small limited companies are set up to exploit small business incentives such as the flat rate VAT scheme and the Employment Allowance.
In some cases such as the MUC, even the contractors are unaware of the structure of the umbrella model under which they are employed. It is easy to see, therefore, how difficult it can be for an engager to spot an illegal umbrella model.
What should engagers do now to ensure a compliant supply chain?
We encourage anyone with a responsibility for a temporary labour supply chain to ensure that your due diligence process for checking compliance in the supply chain, is fit for purpose and meets HMRC’s reasonable care requirements.
Whether you engage contractors that provide services via a limited company or are employed by umbrella companies, there are significant risks involved.
Taking a robust, right-first-time approach to supply chain compliance will give peace of mind and confidence to all stakeholders in the process.
HMRC strongly recommends that engagers seek professional advice and assistance in effectively managing the temporary labour supply chain.
At Workr Group our specialist team can offer impartial advice and assistance with all aspects of your supply chain, including our Umbrella solution – Workr Umbrella and our leading compliance service Workr Compliance.
Subscribe to the Workr newsletter
Our staff regularly write about subjects that interest them in ways that will interest our clients. Sign up to our newsletter and receive notifications when new content is added.