As I am sure you are all fully aware the draft legislation for Off-Payroll Working in the Private Sector has been released. This is very much in line with what we were expecting and have been advising on.
Whilst it is open for comments before being added to The Finance Bill 2019, we do not anticipate any significant changes.
There are some key points of note in this updated legislation when compared to the Public Sector version:
- It is happening in April 2020.
- Clients have an obligation to provide the determination, and the reasons behind this, to the
Supply chain and the worker – later in the article we highlight issues that could arise from this requirement.
- Clients must take reasonable care in carrying out their assessments.
- There is a dispute resolution process between worker and client. If a client fails in their duty of reasonable care or fails to handle disputes correctly then the worker could make their own assessment and if HMRC disagreed, the end client holds the liability.
- Non-compliance in the supply chain will result in either the first agency or end client becoming liable for any unpaid taxes.
- The small company exemption has been confirmed. What is clear is that clients must make accurate assessments of status to avoid challenges and potential liabilities.
Deciding on the assignment status
Many clients we have spoken to are feeling exposed due to the lack of knowledge they have of IR35. The risk of liabilities seems to be pushing some to make ‘safe’ determinations, which may not be so safe if challenged by contractors. Clients generally are desperately seeking a way they can be supported in complying with the requirements of not only providing the status outcome but more importantly the reasons behind this. Professional Passport has been working closely with Contractor Calculator to develop their IR35 Shield product for recruiters and clients. There are some significant development rollouts due in the next month that will provide a simple structured process for clients to follow. Professional Passport will be running joint training workshops for recruiters and end clients on this. One will be in Manchester and one in London aimed at the end of September, beginning of October. The legislation, and supporting notes and guidance, make it clear that the onus is on the end client to ensure compliance throughout their supply chain to avoid the risk of liabilities. We are already seeking many large recruitment companies and MSP’s, as well as Framework agreements, moving to contractual obligations to use our accredited providers.
Worker Key Information Document – April 2020
Another big change due in April 2020 that seems to have missed many companies radars is the requirement for recruiters to provide Worker Key Information Documents at the point of registration.
There are a number of points that are worth highlighting to help you start to prepare:
- These have to be provided to candidates on registration.
- They must follow a prescribed structure and where the agency has a number of providers on their PSL a statement must be provided for each.
- It looks like ‘standard’ packs may be provided by recruitment companies. Professional Passport has been involved in the feedback process to BEIS and more detailed guidance should be issued soon.
Source: Crawford Temple – Professional Passport