IR35 PROTECTION FOR RECRUITMENT AGENCIES
The IR35 changes due to be implemented in April 2021 are estimated to have an impact on over 900,000 UK based limited company contractors working in the private sector. Optimus Shield can help recruitment agencies transition smoothly
Is your recruitment agency prepared for the impending IR35 changes to be introduced in April 2021?
IR35 was first introduced in 2000 with the aim of reducing tax avoidance by contractors who HMRC believe to be “disguised employees”. Essentially, this was aimed at people who work in a similar way to full-time employees but charge for their services using their limited companies to make their business as tax efficient as possible.
How will IR35 changes affect recruitment agencies?
Currently, an individual working through their own limited company is responsible for determining their IR35 status and making deductions for tax and national insurance contributions on each contract they undertake.
However, in April 2021 the determination of IR35 status will become the responsibility of the end client or hirer and should be passed down through the supply chain (if a fee payer is in place – generally a recruitment agency) to the contractor. Tax liability will sit with the “fee payer” – the recruitment agency – who must deduct tax and national insurance contributions and report using Real Time Information (RTI).
How can Optimus Shield provide IR35 protection for recruitment agencies?
IR35 changes will significantly impact recruitment agencies who supply workers operating through intermediaries, such as PSCs, by adding to their responsibilities and increasing liability. Therefore, it is vital recruitment agencies take steps now to prepare for IR35 changes in order to mitigate all risk and protect themselves and their contractors.
This is where Optimus Shield come in….
Optimus Shield offer a service that
- Determines the IR35 status of a contract
- Produces the government required status determination statement
- Offers an end to end payroll process for all eventualities
- Is supported by both legal and tax opinions
- Includes comprehensive insurance cover to mitigate all risk from your supply chain
- Provides personal protection insurance for the contractor in the event of any HMRC investigation.