As of 6th April 2020 new rules apply for companies hiring temporary workersGET A FREE IR35 HEALTH CHECK
As of 6th April 2020 medium and large businesses (as defined under the Companies Act 2006) become responsible for determining the employment status of any limited company contractors it engages either directly or through an intermediary such as a recruitment agency.
Any contractors deemed to be ‘inside IR35’ i.e. employed for tax purposes must have PAYE & NI deducted at source and the payrolling entity (e.g. the recruitment agency) must also pay Employers NI and the Apprenticeship Levy.
Where these statutory payments are not made, the liability for those payments can sit with the hiring company or intermediary.
There are a number of features of an engagement that must be used in
determining an individual’s IR35 status. These are:
Do you as the hirer control when, where and how the individual’s work is completed?
Can the individual send a replacement worker to carry out the job or must they complete the work themselves?
Do you expect the worker to undertake the work when asked to do so and does the worker expect you to provide consistent work?
Does the worker provide their own equipment or do you provide the equipment?
To what extent is there any financial risk to the worker in performing the work required or does the risk lie with you as the hirer?
Is the worker paid per hour or per day, or are they paid a fixed price for carrying out the job?
Does the worker have access to staff facilities, attend staff meetings, receive staff benefits etc? To what extent have they become a member of the team?
Does the worker provide their services exclusively to one client?
There are essentially 2 approaches to dealing with the new off payroll working rules.
Want to eliminate financial risk from your supply chain? Get in touch to book a free health check with one of our employment advisors.