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IR35 off-payroll working rules are here to stay, and as we hit the first year anniversary, we’re beginning to understand the full impact of the new legislation. In our recent IR35 survey, there was one issue where there was immense consensus. A whopping 82% of recruiters said that the IR35 reforms had added to their compliance burden.
That means that for 4 out of every 5 recruiters, IR35 is slowing things down, holding up contracts and giving them extra work to get through for each placement. Unfortunately, we can’t wave a magic wand and make the burden of IR35 rules and all the associated bureaucracy and paperwork go away – but we can offer you a few tips on how best to deal with IR35 so that it’s as hassle-free as possible for your recruitment business.
In this article, we take a look at some steps that recruiters can take to ease their firms through that extra compliance burden.
Get educated
Does everyone on your team understand IR35 and what it means for your business? Any gaps in knowledge or uncertainty about next steps can cause blockages and delays in the onboarding process which can be bad for everyone.
In the very worst case scenario, they could let something slip through the net that leaves you or an end client open for investigation by HMRC. They’re also likely to slow things down, which may mean your contractor moves on to another job elsewhere, or your end client loses patience with you. That’s why staff education and training is vital.
Invest in IR35 training for your team so that everyone understands what the reforms mean and what each party’s responsibilities are under the new legislation. A well-informed staff team can make decisions quickly, ensure processes run smoothly and spot potential errors that, if missed, might lead to fines, interest or penalties in the future, should HMRC investigate.
Set up a process
IR35 reforms have now been in place for a year, and the soft-landing period promised by HMRC is over. If you haven’t already got a process in place to deal with IR35, the time is now. Having a process, with easy-to-follow steps and clear delineation of responsibility, is the best way to ensure that your compliance is watertight.
This process needs to be developed by someone with a really good grasp of the rules, and shared widely with everyone in the team. Undertake regular reviews of the process to ensure that it’s being followed correctly and that there aren’t any teething problems. If you have already been using a process, now that we’re at the year anniversary, this might be a good time to review how things are working for your staffing business, and make any necessary tweaks to your compliance rules.
Consider an IR35 status tool
One important step in your process might be using an IR35 status tool to carry out status assessment of engagements. Taking a market-trusted employment status tool to your end client.
An independent tool is a really good way to structure what might otherwise be tricky conversations with clients or contractors about status determination, and is a way of demonstrating due diligence with regards to the legislation. There are quite a few options on the market if you’re looking for a status tool – we did a rundown of some of the main types in our blog ‘How to decide which IR35 tool is best for your business’.
From HMRC’s own simplistic tool CEST, to expensive fully manual consultancy services, this blog gives an overview of some of the most popular IR35 solutions. Our recent IR35 report also found that end clients who were using CEST had a greater reduction in their number of outside IR35 contractors they engaged over the past year, compared to end clients who were using an independent status tool – another reason to look beyond the Government’s own tool.
Get in touch with Kingsbridge
Bringing in expert support can be the best way to help with the compliance burden of IR35. A problem shared is a problem halved – especially if you’re teaming up with an expert in IR35 affairs. Kingsbridge offers a complete IR35 solution to support your staffing business so you can feel at ease dealing with all things IR35.
The jewel in our crown is our Kingsbridge Status Tool, the only hybrid IR35 assessment tool on the market. The tool uses a series of carefully-worded questions, developed by our Head of Tax Andy Vessey, to produce an opinion on the If a decision is borderline, the case will be passed to our expert team for a careful, precise manual review. For extra peace of mind for everyone in the supply chain, you can back up this compliance with IR35 insurance.
In the event of an IR35 investigation, it flexes to protect whoever HMRC deems liable, covering fees, penalties and defence costs. We can also support you with getting your IR35 processes in place through our consultancy service, which can include things like process reviews, client onboarding and staff training.
For more information about any of these things, please contact our partnerships team. They’ll be able to give you a free demo of the Kingsbridge Status Tool and put together a package of support to help your recruitment business with your IR35 compliance burden.
