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The challenges and positives IR35 can present to your business

IR35’s Off-Payroll rules will extend to the private sector in April 2020. Consequently, businesses could experience disruptions unless they begin to prepare in good time.  LMA Recruitment are here to look at how we may be able to help.

What is IR35?

Currently, limited company contractors are solely accountable for the determination of their own IR35 employment status. The change in law makes you the ‘end-user’ client responsible for determining their individual IR35 employment status. This decision considers if a contractor engaging with your business is acting as a genuine independent contractor or as a ‘disguised employee’ and therefore subject to PAYE employment taxes.

Challenges of IR35:

  • Potential disruption of current, and future projects as businesses begin to determine the status of their contractors and the increased administrative burden this brings.
  • Could damage the flexibility of a company’s workforce and the sourcing of contingent workers. 

Positives of IR35:

  • IR35 offers an opportunity to audit your workforce thoroughly and make any necessary adjustments. 

  • Removes the risk to your business of working with ‘disguised employees’ and the associated tax and legal implications.

  • Can consider moving  direct hire limited company contractors to agency partners in order to distance your business from a potential employment relationship.

  • The rules mean companies will have to create and abide by an Off-Payroll process with compliance at the forefront, across their workforce and this will mitigate overall financial and tax risk within labour supply chains. 

Actions to take: 

  • Companies should asses the IR35 status of their contractor workforce before April 2020. 

  • Speak to LMA Recruitment today as your trusted agency partner to see how we can help and work with you.

  • We can speak to contractors on your behalf to ensure a smooth transition into the new rules. Securing your workforce sooner rather than later will protect you from potential disruption.

  • Enter into talks with agencies and contractors and re-negotiate rates now if this is necessary.

  • Knowledge Sharing: Use us as your agency partner to understand how the market is responding to the changes and insights into how other businesses and contractors are reacting to the new rules.

  • We will happily speak to any client or contractor even if they don’t currently work with us.

  • Implement new procedures surrounding recruitment, making sure you are mindful around compliance. Be careful of non-compliant umbrella solutions.

LMA was recently voted 2nd in The Sunday Times Best Small Companies to Work For and received a 3-star accreditation from Best Companies. We are always looking for innovative ways to help our clients and candidates succeed in their goals. 

If you're struggling to find that perfect candidate, contact us and see how we can help!

 

 

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