Act Now!
With all that has happened in the Public Sector since April 2017, it was inevitable that the Private Sector was going to follow suit. The only saving grace for some agencies and workers was the fact it has been pushed out to April 2020. Even with this extra time available, it would seem that many are still doing nothing about the changes and leaving their heads in the sand.
What we do know is that the Private Sector will mirror the Public Sector once a further Consultation has taken place in the next few months. The Consultation will leave a further period of uncertainty plus reducing the time between that and the new financial year of April 2020.
These changes will affect Medium to Large businesses with Small businesses being excluded (not exceeding any two of the following, £10.2 million Turnover, £5.1 million profit, more than 50 employees). This exemption does not affect the Public Sector however.
Agencies will need to take more emphasis on “reasonable care” when making their determinations about employment status. HMRC have given very little guidance on what that means so consequently there are likely to be more and more falling fowl if not actioned. “I was not aware” will just not cut it.
The Consultation has acknowledged that CEST, the tool designed to help make hirers make their determinations, can be improved. Which comes as no surprise following the Public Sector changes in April 2017.
One area that is pleasing to see is that HMRC are setting out what people should do if they do not agree with the business’ decision regarding their employment status, inside or outside of IR35. This was clearly not addressed for the Public Sector changes.
A serious concern for Public Sector and now soon to be Private Sector hirers was when disagreeing with their employment status, who have previously been classed as self-employed, they are exposing that worker to HMRC who will in turn investigate their historic tax returns. HMRC are stating that they will not “focus on historic cases” and “targeted campaigns into previous years”. We shall see.
The Public Sector changes have increased the use of “non-compliant” Umbrella and Off-Payroll solutions, thus creating a Criminal Finances Act risk for those less vigilant or risk takers in the supply chain. With the exclusion of small businesses within the Private Sector rules, it is almost certain that unscrupulous organisations in the industry will already be looking at ways to navigate around the rules. I am sure the Consultation will looking into this and any loopholes. Just don’t do it.
So what do you do now?
A year away sounds long enough but we all know that it will be on top of us all too quickly. Act now get your ducks in order, understand how IR35 will affect you and your workers, look at your options, work with fully compliant organisations and make sure that all staff are aware of the changes leading up to April 2020.
ePayMe are here to help, if you would like to discuss how these changes are likely to affect your business and workers then please do get in touch.
01252863700 info@epayme.co.uk www.epayme.co.uk