IR35 for Recruiters
IR35 for recruiters
As a key part of the contingent workforce supply chain, the recruitment agency is often the fee-payer, i.e. making the payments to the contractor. This means that they are responsible for ensuring all tax, National Insurance and any other deductions are made correctly.
It also means understanding, and equally, being able to explain to both the contractor and the end client, the complexities of the off-payroll regulations. This includes knowing the implications of determining a contract to be inside or outside IR35.
Establishing the key facts
It is important to answer the questions below and understand the implications. We’re here to help guide you through.
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Status determination statements (SDS)
What do recruiters need to know?
When it comes to determining an SDS status, there are a number of key consideration points which recruiters need to know and equally, should be putting into practice.
What are your responsibilities? Who in the supply chain provides the SDS? And what is the disagreement process for challenging an IR35 status? We’ve put together a handy guide which explores all these key questions that matter to recruiters.Read our guide here
HMRCs ‘light touch’
I understand that HMRC have said they will take a ‘light touch’ approach following the implementation of off-payroll. What does this mean?
HMRC has indicated that: “You will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months of the operation of the new rules unless there’s evidence of deliberate non-compliance. We will not charge a penalty if you took reasonable care to apply the off-payroll working rules correctly but still made a mistake, including making mistakes in status determinations.” However, that grace period ended on 6 April 2022. Supply chains are reminded not to rely on only one or two of the key IR35 factors in insolation (i.e. including mutuality of obligation, control, and the level of personal service (such as the right of substitution) when making IR35 determinations. Pursuant to recent case law, whilst those factors may be present, the assessment should be made looking at all of the facts and circumstances in the case i.e. looking at ‘the whole picture’.
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