two people shaking hands and smiling

Qdos’ role in protecting contractors through IR35 reform

Reflecting on the past five years of IR35 reform

As of 6th April, for contractors providing services to medium and large businesses, it is no longer your responsibility to determine your IR35 status. As part of the new off-payroll working rules, the responsibility and liability for IR35 have been transferred to the fee-paying party in the supply chain. This follows an almost identical move made in the public sector in 2017.

At Qdos, we have been preparing for the arrival of IR35 reform in the private sector for a number of years. We started preparing well before reform arrived in the public sector and have continued in our efforts ever since, all leading up to the historic 6th April 2021 deadline.

Now that deadline has passed us by, and the industry is beginning to settle into its new roles and responsibilities, it’s time to take a breather and think about everything that has been achieved. This concerns both the achievements from the Qdos team and the achievements of the wider industry, not forgetting everything that we must continue to do. After all, there is plenty left to do.

 

Leading education and keeping it simple

Where IR35 is equal parts ambiguous and complex, we have endeavoured to cut through all the unnecessary jargon and provide contractors with details of the reform as they are announced.

By simplifying a very complex piece of legislation and making this information accessible to our customers, we aimed to make the transferral of responsibility from contractor to end client as seamless and straightforward as possible.

A big part of this process of readying the industry for reform started early, with a mixed approach of webinars, advice articles, whitepapers, and free to download guides.

Because of a more proactive approach taken by the wider industry, as we neared the 2021 reform deadline we saw many end client organisations making a sharp u-turn on their decisions to blanket-place their contractors, instead opting to prepare by educating their staff and putting the proper processes in place.

We have assisted over 2,800 clients and agencies to take fair assessments and manage IR35 reform as it was intended alone, helping to ensure the contracting industry continues long into the future, and we continue to push this education after reform.

IR35 reform infographic of Qdos statistics

 

Ensuring fair placement of contractors

Most importantly, we have provided over 19,000 contractors with fair and compliant IR35 status determinations since we launched the Status Review service for clients in 2017. Of these assessed contracts, 87% belonged outside of IR35.

With the use of our rigorous and trusted assessment processes, contractors can be confident of their compliance and continue providing professional and flexible services.

Whilst the rules have changed the way IR35 is administered, we hope that this provides some hope for contractors who may have been forced through unnecessary PAYE arrangements.

 

Challenging HMRC

We, along with others in the industry, have questioned and even challenged the use of HMRC’s IR35 tool, Check Employment Status for Tax (CEST). The use of CEST is something that equally impacts contractors after IR35 reform as it did before it. The only difference is that now the choice to use CEST to determine IR35 status is out of the contractor’s hands.

Not only does CEST ask less than a quarter of the questions that HMRC’s own tax inspectors might ask during an IR35 investigation, but it is likely that where it works in HMRC’s interests they will not stand by original CEST determinations.

Our campaign, which included other IR35 service providers, called ‘anything but just CEST’ was launched in an effort to stop businesses from using CEST in isolation to determine the IR35 status of their contractors.

Whilst IR35 reform may have passed us by, the risk for contractors is still here. In fact, two contractors who are now being support by us here at Qdos have recently been contacted by HMRC regarding their IR35 compliance not long before IR35 reform’s implementation. For more information on these cases and whether this is a sign of things to come concerning retrospective enquiries, see the full article here.

 

We are proud of the support we have been able to offer and the impact that our work has had for contractors and the wider industry. To keep up to date with news as it’s announced, follow us on LinkedIn or subscribe to our monthly newsletter, providing you with the highlights of the months business news.





By:Qdos Contractor

Need Help?

 

Call our team on 0116 269 0999
Or arrange a call back

Call back
Chat with us