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So all doubts have been removed and we now know that the IR35 off payroll rules changes will affect the Private sector from April 2020. A year later than feared, which will allow our industry the time needed to adapt to these once in a generation alterations.
There is already a good deal of commentary on this subject, including whether this is the right thing to do or the right time to do it. It doesn’t matter if you agree or disagree with the Governments move, the impact is so far reaching that we all have to prepare as April will be here before we know it.
So, what does it mean? Put simply, from April 2020 HMRC will move the burden of responsibility on IR35 compliance to the Recruitment Companies rather than the Workers. In principle, the end clients can be held liable but in practice their contracts will be composed to ensure the Recruiters will cover any financial penalties. Since the same thing took place in the Public sector, HMRC have shown they are not going to let this rest. Surely this will a case of rinse and repeat for the Private sector?
At this time, we would be wise not to ignore the entire toolbox that HMRC have put in place over the last decade or so. The, almost ignored, MSC legislation looks to be another line where HMRC are beginning to gain traction. One industry insider I spoke with recently said that HMRC believe this win, if it finally proves to be the case, could become more beneficial than IR35!!
All this means Agencies need to be in control of their supply chain and can no longer allow Payroll companies or the Contractors to operate as they wish. Failure to be in charge of this could have devastating, in some cases terminal, consequences for their business.
You will have to improve, or reaffirm, your understanding of the technical aspects of payroll compliance, but that doesn’t have to be too burdensome. Taking the correct steps to ensure you have the right supply chain in place should be all you need to ensure.
IF Payroll, part of the IF Workforce Group, recognise all the trust and legal issues facing the industry today. We provide an employed solution to UK based contractors with no attempt to knead any rules in a way that could be challenged by HMRC. All costs and processes are clearly shown, and our standards are aligned to the FSCA code of conduct. All of this is designed to provide assurances and evidence to our Recruitment Agency clients that the Contractor workforce is meeting HMRC standards. Our payroll solution removes the Agency from all IR35, MSC and any other relevant legislative risks.
To find out more about how we can help you secure your payroll compliance, talk to us today 0203 131 8988.