Our IR35 solution could help to monitor a person’s IR35 status by sending out pre-defined checks to contractors, clients and intermediaries and evidencing attestations with supporting material.
What are the new IR35 rules?
- Recent public sector working legislation is being rolled out to the private sector by HMRC to tax disguised employment at a rate similar to employees.
- It affects individuals that provide their services to a client through their own intermediary or would have been an employee if they were providing their services directly.
- Under these circumstances individuals will pay broadly the same tax and National Insurance contributions (NICs) as an employee.
- Intermediaries must calculate a ‘deemed employment payment’ which is the amount deemed to be the income of the worker, once deductions and employer’s NICs have been removed.
Why does this present a problem?
- First of all, ownership and accountability can be hard to assign when someone is wary of the consequences resulting from the potential exposure.
- The complexity of the new rules makes it hard to be confident in your processes, they aren’t easy to navigate and HMRC won’t be producing a digital version anytime soon.
- Dispersed compliance data is tricky to collect, if you’re relying on spreadsheets they can be overwritten and have limited scope for audit.
- Storing evidence can also be a problem, some firms don’t trust their HR systems and documents are being kept on multiple servers.
- All this activity comes at a cost and if the authorities do come knocking you may not have long to find all the relevant information.
- This is a critical regulation because it comes with significant penalties including backdated tax and National Insurance contributions along with any interest accrued.
How can Solvassure help?
- Solvassure’s digital assurance framework helps firms and public bodies track compliance by their contractors to the IR35 regime, storing everything in one place.
- In addition to monitoring the service delivery process, it also captures attestations to legislative obligations from “control and direction” to running “business on your own account”.
- Cloud based and mobile enabled technology sends out pre-defined checks to contractors, clients and intermediaries and highlights exceptions to key stakeholders in real time.
Client engagement activities are captured digitally, which in turn enables key documentation to be produced efficiently and historical records accessed quickly.
- Allocation of all stakeholders’ roles and responsibilities
- Interactive stakeholder responsibilities map
- Nomination of management groups & committees
- Creation of client profile and procurement process
- Definition and recording of contractor policies
- Storage of assignment contracts with checklist
Scope of work
Project delivery assurance enables key performance indicators to be monitored, producing templates and collecting evidence where required.
- Contractor profile and description of work to be undertaken
- Schedule with key delivery and payment milestones
- Quality criteria, tolerance levels and approval process
- Project deliverables, completion and handover
- Weekly progress reports with risks and issues
- Board and committee governance checks
- Contractor on-boarding and departure process
- Assignment completion and closure activities
- Fully automated internal communications
A regulatory audit function ensures that every element of the legislation is automatically monitored with exceptions highlighted to key stakeholders in real time.
- Control and direction of management
- Mutuality of obligation for parties
- Provision of contractor’s equipment
- Level of financial risk undertaken
- Personal service and right of substitution
- Regularity of payment schedule basis
- On-going length of engagement
- Access to staff benefits and services
- Client’s right of dismissal
- Working for other clients
- Self employment intention
- Business like trading
- Incident reporting process
We can also provide a managed service to set up and administer your IR35 assurance obligations using our technology, whilst you can’t outsource the responsibility you can outsource the process.
- Free up your team to concentrate on business as usual activities
- Ensure that all processes are set up and run with minimum effort
- Improve the quality and effectiveness of your policies and controls
- Easily scale up (and down) trained resource to meet demand
- Enrich your compliance productivity, quality and performance metrics
- Convert fixed costs into variable costs and release working capital
- Add new regulations into the same service to increase savings further
Our software as a service solution provides a single source of information twenty four seven and lowers compliance expenditure with cost effective pricing.
- Secure cloud based platform
- Data centre conforms to ISO27001
- Smartphone app with location marking
- Business hours helpdesk
IR35 is a UK tax legislation designed to stop contractors working as disguised employees by taxing them at a similar rate to full time staff.
It includes obligations for the engaged parties that range from “control and direction” to running “business on your own account”.
HMRC’s Check Employment Status for Tax (CEST) tool aims to help contractors, clients and agencies establish whether IR35 applies to an engagement.
If a contractor is judged as employed for tax purposes, the firm paying the contractor would need to make deemed employment payments for the duration.
These off-payroll rules were introduced into the public sector in April 2017 and will be rolled out to the private sector in April 2020.
SMCR Compliance Monitoring
Find out more
Where is our material licensed from?
The National Archives has developed the Open Government Licence as a tool to enable Information Providers in the public sector, including HMRC, to license the use and re-use of their Information under a common open licence. The Keeper of the Public Records has authority to license Information subject to copyright and database right owned by the Crown. The extent of the offer to license this Information under the terms of this licence is set out in the UK Government Licensing Framework. This is version 3.0 of the Open Government Licence, however The National Archives may subsequently issue new versions.