5 months into the IR35 Off-Payroll Legislation, and companies are still facing the effects of these changes. It is now more important than ever to have a good understanding of who you’re working with.
Due to the changes, the responsibility of assessing a contractors IR35 status is now down to the end hirer. Making an accurate assessment as part of the compliance process will help avoid any liabilities that could arise from not carrying out this check.
The new legislation has meant that contractors are more regularly working through umbrella companies, however not all of these are fully compliant. A rising number of providers are pretending to be umbrella firms, when they are actually tax avoidance schemes.
As a recruiter, it is vital to get to know your partners throughout the supply chain. You should take as many steps as possible to understand the umbrella companies that you are working with, and ensure they are operating within tight compliant standards.
Here are a few checks that can be carried out to identify if you’re working with a compliant or non-compliant supply chain:
- Run a credit check and investigate their accounts
- Check for any conflicts of interest, failed businesses, financial difficulties etc
- Check their contracts of employment, insurances and levels of cover
- Do they hold a recognised compliance accreditation certificate?
So what does a compliant umbrella company actually look like? A compliant company should provide a clear contract of employment that details how they deal with pay, what deductions there may be and how holiday pay is worked out. They will likely operate a PAYE pay system as this is the secured tax system used by HMRC. A compliant company will also provide a realistic take home pay projection, of up to 75%. Any promise of a take home above this percentage should be a warning sign and likely to be coming from a non-compliant provider.
Click here to read our blog post on holiday pay within the education sector. Alternatively, click here to read ACAS’ advice on holiday entitlement and pay depending on your situation.
At ePayMe, we are proud to be accredited by Professional Passport. They are the largest independent assessor of payment compliance and the only insurance backed accreditation. You can rest assured that your payroll needs are in safe hands with us.
For any enquiries please don’t hesitate to contact us on 01252 863700 or info@epayme.co.uk
Source – https://bfi.co.uk/blog/end-hirer-essential-checklist-for-a-compliant-supply-chain/