IR35 Soft Landing Ending – Industry Trends: Part 3
In our recent survey, completed by more than 500 businesses, over 30% of participants said they had outsourced some or part of the IR35 review processes to their recruitment agency.
Below we examine the main issues with this approach and why this will leave your business with trouble proving Reasonable Care has been taken:
- The legislation clearly states it is the ‘Clients’ responsibility to assess the IR35 status of their workers, in no way does it mention outsourcing this to the supply chain
- To prove you have taken Reasonable Care you will need documented evidence of your process and reviews, outsourcing this removes this ability and knowledge of the process that has been completed
- The person completing the assessment must have adequate knowledge of IR35, if you have outsourced this process how do you know what knowledge they have?
- If you, as a business, do not take ‘Reasonable Care’ then all liabilities including, unpaid Tax, NIC, fines, penalties and interest will rest with you – how does your outsourced offering give you protection from this?
- You are outsourcing the review to a party that does not have a full understating of the contractor’s working practices, only you, as the client they provide this service to, can have this understanding and visibility
HMRC have provided this advice and guidance on what constitutes Reasonable Care, via an Employment Status Manual.
The points above are all covered within this HMRC document and if you have adopted any of these an urgent review is required into your processes!
For any business that is concerned with what they have read so far get in touch, as we would be happy to offer our expertise along with a selection of free IR35 reviews to test your process.