What is IR35?
IR35 was introduced in 2000 to address concerns relating to individuals who supply their services via an intermediary (such as a Limited Company) instead of as an employee and therefore avoid paying employee income tax and national insurance contributions.
Where an assignment is deemed ‘inside’ IR35, PAYE deductions must be made from the contractor’s pay. Any assignment ‘outside’ IR35 is classed as a genuine B2B service and is therefore not subject to the same tax treatment as employees. Advance TRS are here to support you through these reforms.
We have partnered with IR35 experts Kingsbridge and Liquid Friday to help our client and contractor communities prepare for the changes in legislation. So, browse our latest IR35 news, read our FAQs or sign up to one of our contractor briefings across the UK.
Contact our team
Not sure how much IR35 will impact you or your business? Get in touch with our team to start the process and get an indication of how much effort your organisation will need to put behind IR35 to ensure you’re ready for April 2021.
What is changing and how does it impact me?
From April 2021, following changes in the public sector in 2017, the government will be extending the reform to the legislation to capture large parts of the private sector. The key change is that the responsibility of defining the IR35 status of the assignment will switch from the individual’s Ltd company to the client, as the recipient of the services.
The requirement of the legislation states that all companies must take ‘reasonable care’ when assessing if roles are inside or outside of IR35. Taking a ‘blanket approach’ to assess all roles won’t deliver this.
The potential financial penalties can be significant if incorrect steps are implemented, but there is time and support available to help. We have urged our clients to take a calm approach but also suggested they think about these changes and to act now.
What do I need to do before April 1st?
We are working with clients and contractors to ensure everyone is ready for the change with the new financial year. Here are some key things you need to do before March 2021.
Speak to your consultant
The best place to start is by calling your consultant. They will be able to discuss how the reforms are likely to impact you and your method of engagement.
Get a self-assessment
Next, you can use the Advance TRS free self-assessment tool to confirm your determination and which method of engagement is suitable for you going forward.
Confirm your method of engagement going forward
Once you have completed your self-assessment you will need to confirm any changes with your client and agency to issue any new contracts/rate changes and agree your transition date.
Purchase IR35 insurance
To ensure you and the supply chain are protected, we recommend purchasing IR35 Protection Insurance from our partners Kingsbridge who offer a Zurich underwritten policy.
Join an IR35 Webinar to understand how we can support you through the transition
We will be running regular webinar’s throughout the next few months. Register below to sign up to one of our upcoming webinars where you can learn how we are approaching IR35 reform and how we can support you to be ready. You will also have the opportunity to ask any questions you may have.
The Advance TRS Approach
Be prepared and proactive
Due to the scale of the impact of this legislation, we are preparing now to ensure our compliance and working practices facilitate confident determinations.
Listen and Learn
Our ability to gather intelligence from multiple sources allows us to learn at a faster pace and deliver the most informed approach to all parties.
Face-to-face meetings and regular bulletins will provide clients and contractors with the most up-to-date information on how best to set out our working practices.
Working with Kingsbridge to offer free self-assessments for contracts.
An Insured Solution
We understand the importance of peace of mind, so have worked with Kingsbridge to offer a Zurich underwritten insurance product to protect the whole supply chain.
Why Advance TRS?
- Offering free self-assessments and IR35 insurance to protect the whole supply chain
- APSCO accredited engineering recruitment consultancy with sector specialist consultants
- ISO18001, ISO9001, ISO27001 certificated and 5* RISQS since the inception of the scheme
- Huge financial investment in contractual documentation reviews from recruitment expert solicitors
- Robust contracts and terms of business that are compliant with current government legislation
- Open book policy on working practices with contractors and clients
- Excellent legal support from expert recruitment and financial specialists
- IR35 guidance from FCSA accredited supply chain partners
- Partnered with Kingsbridge Insurance, one of the UK’s leading suppliers of PSC insurance packages
- Over 100 years collective experience of engineering recruitment
- Dedicated business services team focused on contractual compliance and payroll excellence
- A compliance-focused supply chain partner experienced in supporting all levels of project delivery
Group Operations Director
As Operations Director, Paul has taken the lead on preparing Advance TRS and our clients for the roll-out of IR35 to the public and private sectors. Paul has partnered with leading industry professionals to ensure Advance TRS terms of business, contracts and systems are compliant and fit for purpose.
“It is important to learn from the public sector reform and ensure that we keep contractors fully briefed of their options whilst enabling clients to make confident and informed decisions.”
A little more background info on IR35
HMRC IR35 legislation has been in place since 2000, but non-compliance is widespread.
HMRC estimate that only 10% of those who should be applying the rules do so, which will cost the Exchequer £1.3 billion in 2023/24. This deprives vital public services of important funds and is unfair to taxpayers who are complying with the rules.
Whilst the compliance of PSC workers has been a relatively mute subject for the last 20 years, HMRC have now realised there is a significant need for focus and attention on the management of this area of taxation, more specifically in relation to employers’ national insurance contributions.
With such a significant growth in the number of £multi-billion engineering projects across the UK, there will always be a requirement for the engagement of a highly skilled and flexible workforce that is prepared and willing to move from project to project.
It is essential that this workforce becomes more educated on and compliant with the options that are available to them if they wish to remain off-payroll for the duration of their assignments. Advance TRS Ltd. are committed to providing the highest level of service and engagement throughout the recruitment process to ensure that workers and clients can deliver their services and their projects successfully in the knowledge that their status determination truly reflects their employment status.
It is important to learn from the public sector reform and ensure that we keep contractors fully briefed on their options whilst enabling clients to make confident and informed decisions.
It is essential to approach the private sector reform through the utilisation of all information and facilities available to each member of the supply chain will offer the flexibility to evolve with HMRC decisions whilst retaining a common goal of providing resource to deliver projects.
It is becoming increasingly clear from HMRC and other parties that the public sector ‘blanket approach’ determinations should be replaced with the recommendation that contractor IR35 status assessments are dealt with on a case-by-case basis. This approach offers an assurance to valuable workers that their interests are treated fairly, in line with the legislation and not just for the benefit or safety of the end-user.
One of the key aspects of managing the implementation and impact of the IR35 private sector reform is to ensure that each party in the supply chain recognises their responsibility, communication is clear and processes of due diligence and compliance are auditable. Contractors must take responsibility for the management of their accounts and affairs whilst engagers must extend fair treatment or ‘reasonable care’ to their contractors by preparing diligently and not leaving off-payroll working processes and considerations to the 11th hour.
Advance TRS have the operational capability to adequately deal with the extra administrative burdens and will work closely with all parties to manage a case-by-case approach.