When reform to the off-payroll working rules is introduced to the private sector in April 2021, at least 2,200 organisations will prioritise fair and well-informed IR35 assessments, data extracted from Qdos’s Status Review facility shows.
Having launched our Status Review facility prior to IR35 reform in the public sector in 2017, recruitment agencies and hiring businesses continue to use it in preparation for the arrival of further changes to the IR35 legislation.
This reform will see medium and large private sector companies become responsible for administering the tax status of contractors from 6th April 2021 – it was due to be enforced in April of this year, but the Government postponed it for 12-months due to COVID-19.
As part of the incoming changes, recruitment agencies handling payments to contractors on behalf of the hiring organisation – often referred to as a fee-payer – will become liable for IR35 next April.
The complexities of the IR35 rules, their administrative burden and the risk they pose to businesses meant a number of organisations banned contractors in the lead up to the anticipated 2020-rollout. In many cases, independent workers were told they could no longer work outside IR35 and must be engaged inside the legislation, via an umbrella company or become an employee.
However, following the 12-month delay to these controversial changes, our research tells us 32% of these businesses have reversed these decisions. These companies make up a number of the thousands that Qdos is helping ensure they can continue to compliantly engage contractors outside IR35 from April 2021.
At the time of writing, more than 9,000 contractors have had their IR35 status determined fairly via the Qdos Status Review facility. Of these independent assessments, 87% have been deemed outside IR35. In contrast to HMRC’s IR35 tool, Check Employment Status for Tax (CEST), which cannot deliver an answer in 15% of cases, the Qdos team will deliver an answer in every scenario. Assessments determined outside IR35 are then protected by IR35 insurance, through the service. This means the fee-payer minimises its risk.
The combination of independent IR35 status reviews supported by insurance allows agencies and hiring organisations to place and engage genuine contractors outside IR35, while also protecting them from the risks of reform.
The Qdos Status Review facility is a trusted end-to-end solution built by our experts, who review over 2,000 contracts monthly and have specialised in IR35 compliance since the legislation was enforced in 2000.
As Richard Adamthwaite, Director at one Required IT, of the hundreds of recruitment agencies we work with, explained:
“The Qdos IR35 Status Review tool offers two great advantages over standard agency contact with clients. Firstly, it has helped us develop a deeper, more consultative relationship with the contractors and end-clients we work with. Secondly, it has given our end-clients the confidence to act pragmatically when looking at the IR35 roll out to the private sector. It’s great to be able to engage in this way with end-clients whilst at the same time talk to contractors confidently about their IR35 status moving forward. It is a tool I would thoroughly recommend using.”
To speak to one of our friendly IR35 experts about the Qdos Status Review facility, designed to help businesses navigate changes to the off-payroll working rules, please call 0116 478 3390 or email [email protected].
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