IR35: Assessing your off-payroll workers is an ongoing responsibility

From 6 April 2021, the off-payroll working rules (known as IR35) have transferred the responsibility to evaluate employment status and account for PAYE/National Insurance contributions (NICs) from the individual to the engager.

These changes will affect businesses who engage with personal service companies (PSCs), either directly or via an agency.

Businesses need to evaluate the likelihood of contractors requiring PAYE and NICs withholding now and in the future.

What is IR35 Shield

As well as providing technical support, we use a tool called IR35 Shield. IR35 Shield is an employment status evaluation platform, which can help you understand the likelihood of your contractor population being caught by the off-payroll working legislation. It provides an automated assessment workflow, providing immediate results.

IR35 Shield pays attention to detail and process to ensure the determination adheres to the legislative requirement for reasonable care, providing strong protection against a challenge by HM Revenue & Customs (HMRC).

Status evaluations consider all factors based on a combination of legislation and case law before reaching a conclusion. The tool is able to make accurate and unbiased risk determinations.

IR35 Shield enables organisations to quickly ascertain the challenges they face with the new legislative changes. The resulting measures taken will help to deliver compliance, certainty and protect all parties in the supply chain.

The platform is also adaptable to future developments in case law. Should new precedents be set in court, or subtle case law clarifications be made at lower tier tribunals, the system can be extended to run ‘whatif’ scenarios to identify the potential impacts of these changes on a firm’s existing workforce.

How it works

The system gathers information in a collaborative assessment, where we enter the contractual and working practice information. The contractor then receives an email asking them to log on to the system and complete the questionnaire. The contractor completes the questionnaire, which covers the core areas of employment status. Once the questionnaire is completed a report will be populated for each contractor. The report will contain key details around likelihood of being caught by the off-payroll legislation and key indicators along with a full audit trail of questions answered.

A high-level overview of the contractor’s outcome is shared with you, along with status determination statements (SDS) which contains full reasons for the determination.

Throughout the process we can track the progress with the contractor population, questions started, questions completed and those that have not started the questionnaire. To save your business time of following up with the individuals we can send reminders to the contractors to complete the questionnaire and manage the process for you.

Disputes

The platform can also manage the dispute process, which includes tracking all correspondence and providing reasons which automatically notifies all parties. A re-assessment can be issued, or the dispute can be rejected with reasons provided.

What are the benefits of IR35 Shield

• Addresses immediate issues quickly.
• Each determination includes a numbered certificate, for third-party verification.
• Bespoke reasons are provided, based on the specific answers provided, ensuring the SDS is valid.
• A sign-off sheet provides a final layer of proof that all parties have agreed to the determination.
• Status evaluations consider all facts based on a combination of legislation and case law before reaching a conclusion.
• Risk rating and flags allow for a focused review in the areas which matter most.
• Accessible audit trails to ensure compliance with HMRC disputes and internal controls.

If you would like any further information on how we can support you with your IR35 compliance, please get in touch with Stuart Daltrey.