IR35 is Live
The biggest change in UK workforce management history is upon us. Are you compliant?
What is it?
HRMC have updated the legislation called IR35. It means that all medium and large companies in the UK who use what is being termed as ‘off-payroll workers’, must determine whether those workers are inside or outside IR35.
What does that mean?
Well, if they are inside IR35, those workers must pay Income Tax and National Insurance Contributions, which they may not have been paying before.
And what if they are outside IR35?
If they meet the criteria to be outside IR35, they are considered an independent contractor, in the traditional sense and their status won’t have changed.
What does that mean for my organisation?
You need to review all the workers associated with your company that are not on the payroll and determine if they are inside IR35. Where it is determined that the rules do apply and a worker is deemed “ inside IR35 “, the business, agency or third party that pays the individual’s limited company will need to deduct income tax and employee National Insurance Contributions (NICs) and pay employer NICs to HMRC.
What are the repercussions if we are not compliant with IR35?
If you are audited, you will face fines, a detrimental effect on industry reputation, poor coverage in the media, and possible court prosecutions from your contractors.
How long does it take?
It can be a very cumbersome process involving the contractor, the department they work for, HR, procurement, finance, legal and also the Personal Service Company through whom the contractor is paid? Some companies have spent three years preparing but we have devised a programme that can fast-track your contractors to compliance.
We’ve helped many multinationals become compliant with IR35 over the past two years and have launched a digital platform called CXC Comply to decrease the administration, speed up the process and ensure all workers are fully compliant.
CXC Webinar – Preparing your business for IR35
- Deb Aspinall, Contingent Workforce Manager and IR35 Specialist, formerly Walt Disney Company.
- David Newton, Contingent Labour Lead, Aviation Company
- John Smith, MD, CXC Americas
Connor introduces the webinar and gives a brief overview of why the subject of IR35 is so important
What is IR35?
An explanation of what is IR35 by Emmie
Training on IR35
A discussion between Deb and Brenda on who looked after their company’s IR35 determination training
Status determination statement
Emmie explains what’s a Status Determination Statement (SDS) and who is responsible for it.
SDS involving an agency
Emmie explains where the responsibilities lie in regards to an SDS if an agency is involved in the arrangement
The CEST tool
Emmie discusses the CEST tool and what HMRC considers most important to determine IR35 status. Connor and Deborah highlight the ambiguities brought about by the CEST tool.
Challenges with IR35 Part 1
Emmie talks about the challenges with administering IR35
Challenges with IR35 Part 2
Deb and Matt talk about getting started with IR35 and the challenges encountered with implementation
Experience of an aviation company with IR35
David Newton talks about how the aviation company he works for tackled IR35 and the challenges they’ve faced
Utilising your vendor management system (VMS) for IR35
Matt Wagner, General Manager with Simplify VMS talks about how you can utilise your vendor management system (VMS) for IR35
The viewpoint from America
John Smith from the U.S. gives his view on the comparison with the 1099 compliance in the States and where SOW workers stand.
More on IR35
If you’d like to learn more on IR35, click here.