After many years of consultations and numerous delays the UK Government have finally announced that new legislation regarding IR35 in the private sector will come into force from 6 April 2021. With nearly 20 years of experience in the contracting and Tech consultancy fields, Arrows Group have been providing simple but effective end to end solutions that ensures all our clients are attracting the best talent and engaging with contractors in a fully compliant and beneficial manner. Have a look at our IR35 introductory video and video message from our CFO and please do contact us at IR35@arrowsgroup.com or 02038565477 to arrange for a no obligation video conference or meeting to discuss your needs or simply find out more about how IR35 will affect your business
How to use IR35 to your advantage: an Intro from our CFO
Download our Whitepaper
The key elements of the legislation and the consultations are:
Small sized companies are exempted from this legislation
The End Client will be responsible for making a determination if a Contractor falls inside or outside of IR35.
This determination will have to be documented and communicated to all parties in the chain.
The Fee Payer and the Contractor will have the right to challenge the determination – the End Client will need to set up and communicate a disputes process to enable this to happen
As long as the End Client uses reasonable care in making the determination and communicating this to the Fee Payer and Contractor – the liability passes down the chain to the Fee Payer
Candidates inside IR35 will have to have PAYE & NICs deducted at source, in the absence of which the Fee Payer will be liable for those taxes to HMRC.
What are the key components of a determination?
The 3 key elements in determining if a Contractor is inside or outside IR35 are:
Supervision, Direction & Control
Does the Client supervise, direct and control the regular activities of the Contractor , by and large as they would an employee or does the Contractor have large autonomy over how, where and when to deliver the outputs?
Does the service have to be provided by a particular individual or can anyone working for that company (who has the requisite skills and experience) perform the work with little or no input from the Client as to who that individual is?
Mutuality of Obligation
Is there an obligation for the Client to provide work to the individual and is the individual obliged to accept work given by the Client? This can apply to both within and in between contractual periods
How can Arrows Group assist?
Arrows Group will work with our Clients to group the relevant contractors into tight job roles so that determinations can be made on a group by group basis
Arrows group will provide assistance in communicating the process and holding Q&A sessions with all relevant hiring managers & Contractors prior to rolling out any processes
Arrows group will assist hiring managers in developing milestones and objectives that can be captured into a contract. Such a structure will assist in moving the determination further outside IR35
Arrows group will provide advise on practical changes to working practices that will help in moving determinations further outside IR35
Arrows Group have partnered with Kingsbridge, a leading insurance firm and have highly trained staff who will assist Clients in making their IR35 determinations.
All contractors will initially be determined using our online determination tool, which is significantly more sophisticated than HMRC’s CEST tool.
Any contractors who are determined as outside IR35, utilising our online tool, will have this status confirmed by having a full legal and working practices review with one of the specialist law firms in IR35 legislation that are on our panel.
Arrows group will administer the entire process on behalf of our Clients
Where our services and process are used for making determinations, Arrows Group will provide an indemnity for all IR35 liabilities
What happens once a determination is made?
We will assist the Client to see if there are any legitimate changes to working practices that can be implemented that will change the determination to outside IR35
Arrows group will work with Clients to establish if the particular skill set(s) should be replaced by permanent resources. Arrows group’s permanent specialists can assist in the recruitment of such perm resources as required.
If skills set(s) are to be maintained as a flexible resource – Arrows Group will present options available to retain such resources ( see next slide)
Arrows Group will assist Clients in setting up a dispute process, with involvement from one of our legal partners, as necessary
Arrows group will be the Fee Payer for all relevant contractors
Arrows Group indemnifies Clients for all IR35 liabilities for Contractors outside IR35 where we are the Fee Payer and our process has been followed
Arrows Group will review the determination every time there is a change to the Contractor and/or working practices. In any case all determinations will be revisited at least once every 12 months to ensure continuous compliance.
Please contact us for a free consultation on IR35 by dropping your email here
Contact Us Our Process
What else is important?
A clear communication strategy and process to your Contractors & hiring/line managers is essential. This will keep Contractors engaged and bought into your brand and line managers appraised of what to expect and how to handle queries. Arrows Group can assist in this process and host Q&A sessions for small groups
In making a determination it is vital that that line managers and others interviewed regarding working practices are open and honest about the working practices and are not stating what they think should be said as otherwise this could open up a Client to having a determination challenge by HMRC upheld upon investigation.
If you are paying Contractors directly you may wish to consider to protect you against legal claims for IR35 liabilities. We are happy to advise on suitable insurance providers.