IR35 Reforms – What has Workr Compliance been doing?
In a nutshell, we’ve supported our clients with impartial and compliant advice on continuing with business as usual (BAU) post IR35 Reform.
Since the introduction of the IR35 reforms to the private sector in April this year, we’ve been working closely with engagers and agencies to meet the new legislative requirements. We’ve consulted with them through the preparation phase and assisted them in formulating working practices that allow them to continue with BAU.
In our previous article, IR35 Reforms – Key Lessons Learned, we highlighted how introducing the Off-payroll legislation reforms was not the end of the process. We went as far as to say that it was only the beginning of the IR35 compliance lifecycle.
Our approach with clients has looked at how to make the most of the legislation’s opportunity and gain a competitive advantage through a structured, compliant and reflective process.
IR35 Reforms for Engagers
The most significant change brought about by the legislative reforms was the shift in assessment responsibility from the contractor to the engager.
The changes represented a significant increase in responsibilities for compliance and reporting and, in many cases, prompted a recoil response.
In other words, the risk seemed too high and the administration too onerous.
Hence, we observed many engagers making blanket statements or ruling out the use of Personal Service Company (PSC) contractors altogether. Whilst this approach removed the immediate responsibility of IR35, the longer-term effects weren’t given much consideration, and the impact is now beginning to bite.
Skilled contractors are migrating to those engagers offering legitimate and compliant ‘outside IR35’ assignments, leaving those engagers who took the short-term, ‘avoid IR35’ approach with significant skills gaps and problems meeting deadlines, schedules or targets.
In contrast, Workr Compliance has been supporting engagers to implement compliant processes that efficiently and effectively manage the status determination phase, meet the reasonable care requirements of HMRC and compliantly utilise a skilled, flexible workforce to enable BAU.
As importantly in our opinion, we’ve also been supporting engagers with a review of the working practices they follow when engaging contractors.
In many cases before the reforms, engagers treated PSCs in much the same way they treated their employees.
Issuing of corporate clothing, invitations to company socials and the use of company canteens are just a small number of examples of practices that would lead HMRC to a ‘disguised employee’ verdict.
Workr Compliance has been working with engagers to evaluate their working practices when utilising PSCs. We have assisted them in formulating transparent and compliant methods and processes for engaging with PSCs that have been communicated throughout their businesses to ensure a consistent approach throughout all business functions.
In doing so, we have helped our clients gain a competitive advantage in attracting and retaining highly skilled talent whilst maintaining BAU.
IR35 Reforms for Agencies
One of the key benefits of working with Workr Compliance is that we offer an impartial service that supports agencies and the supply chain as well as engagers.
Following the reforms, agencies have come under immense pressure from engagers to maintain the status quo between the flexible workforce and the hiring community. A thankless task, given that those engagers that took a blanket approach removed PSC’s option to contract through their own limited company. Even worse, they forced them into PAYE models resulting in an immediate reduction in rate. Neither action is sitting well with the PSC community.
At Workr Compliance, we have been working closely with agencies in the supply chain to help them understand their role in the IR35 process. We’ve partnered with them to help present solutions or guides to their end clients, and we’ve assisted them in formulating strategies for retaining and attracting the skilled and white-collar talent pool.
IR35 compliance is an ongoing process
In all cases, we have been proactive in encouraging organisations and individuals that IR35 compliance is an ongoing process that requires regular review.
Maintaining a compliant process that is reviewed regularly is the key to avoiding errors, investigations and subsequent fines or penalties.
If your response to the reforms is subsequently causing you problems with administration or the retention or attraction of talent, it’s not too late to change.
For a free, no-obligation audit and assessment of your IR35 compliance process, you can speak directly with Andy Webster, Founder and Director, Workr Compliance, on 07827 810851 or at firstname.lastname@example.org.
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