It’s been months of research, reading and conversations and finally the big day is here: Tuesday 6th April 2021 and the off-payroll working rules for the private sector have officially changed. From this point, alongside the public sector, all limited company contractors must be deemed either inside or outside IR35 before they can commence work with an organisation.
The blueskies team have been working hard to review our current contracts, working with both clients and candidates to get ready for the new rules. We are seeing mixed responses overall; some clients have had their new processes ready since last year so are moving forward confidently with a new way of working. Others, less so.
As previously mentioned, the emphasis is now on the hirer to decide the status of the contractor and provision of a status determination statement (SDS) is required. If the worker is deemed inside IR35, they should be paid via PAYE and are subject to tax and benefits such as pension in the same way that an employee is.
The government CEST tool continues to be met with criticism as it delivers vague results and does not generate a report that could be used as evidence in a dispute further down the line. For employers there are two options; get expert independent assessments for each job role that is usually occupied by consultants or determine it themselves and run the risk of being wrong. Most of our clients who have a large number of contractors have been able to seek professional guidance.
Although we are not able to recommend anyone specific, we would suggest that if you are looking for an IR35 consultant, please consider the length of time they have been assessing cases and ensure that they are FCSA registered. The off-payroll working rule is not a new law. The public sector has been held to this since 2000, so any contractor who has worked within the public sector will have years of experience and positive dispute case outcomes to share with you.
For those of our clients who do not hire hundreds of contractors, moving to PAYE on our payroll has been a popular option. This provides greater flexibility for them and the contractor and ensures that the tax is paid correctly with no extra paperwork or process. It’s an easy win for all and can be organised incredibly quickly so doesn’t delay the accelerated interim solutions that have been lifesavers for many of our clients to date.
Whilst we have all been focussing on the contracts that are in place right now, the new ways of working that will apply from 6th April are just as important. We are huge advocates of the gig economy and will do everything we can to continue to enable this important way of working. More and more professionals are choosing to go freelance, particularly over the past year. Our clients continue to benefit from the innovation, experience and fresh ideas that our freelance community brings.
If you are impacted by IR35, please don’t hesitate to get in touch. We could be happy to talk to you and will do anything in our power to help.