Special Report
determination process that works well to alleviate risk from client. It can be a core value-add in the relationship,” Maley says. He stresses that HMRC will be “quite aggressive” in trying to capture tax through the legislative change. And he urges recruiters to seek advice as well as offering it. “HMRC investigations are massively time consuming, complex and draining. We promote having a very substantive audit trail at the outset. “Agencies should be getting outside support. We don’t know how HMRC will police this but investigations are likely to involve the agency so it’s important to be prepared. Seeking third party advice is worth the time and expense.” Sophie Wingfield, interim director of policy and campaigns at the Recruitment & Employment Confederation (REC), warns that some agencies lack confidence in the preparedness of the whole supply chain for the looming changes to IR35. “Unsurprisingly, Brexit no-deal contingency
FIVE STEPS TO PREPARE FOR IR35 CHANGES The REC says agencies should be ready to answer the following questions: 1 Which clients are SMEs and therefore exempt from the new rules? 2 Which workers are working through their own personal service company? 3 How will their clients be making their determinations? 4 Who is in your supply chain – particularly who is the fee payer? 5 What records do you keep on workers?
HOW TO WORK OUT WHICH CLIENTS ARE EXEMPT FROM THE IR35 CHANGES The new rules apply to all public sector clients and to private sector companies that meet two or more of the following conditions:
35-38 payroll feature 1_RECRUITER DECEMBER_Recruiter.indd 38
an annual turnover of more than
£10.2m
more than 50 employees
a balance sheet total of more than £5.1m
“We would urge any agencies that have not yet prepared to do so as soon as possible” SOPHIE WINGFIELD Interim director of policy and campaigns at the Recruitment & Employment Confederation (REC)
planning, as well as managing through Covid-19, have been prioritised over the forthcoming tax changes,” she says. “However, not preparing and falling foul of the rules could have serious financial consequences, and we would urge any agencies that have not yet prepared to do so as soon as possible.”
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