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How Will IR35 Affect My Business?

  • Publish Date: Posted over 4 years ago
  • Author:by Sohail Suleman

In April 2020, the somewhat controversial IR35 legislation will be rolled out into the Private Sector effectively shifting the responsibility of determining the employment status of off-payroll workers onto the end client.

As a recruitment agency who provides a high number of temporary workers to the construction industry, we have conducted the research and understand the impact this is potentially going to have but also how, as an agency, we can help our current and future clients.

The construction industry as a whole relies heavily on temporary members of staff and in the industry alone somewhere between 30% and 40% of workers deem themselves as self-employed.

Once the IR35 legislation is rolled out then it will be up to the hirer to make this determination and many have already taken steps to ensure it is known that every worker will be deemed as an employee and therefore subject to all the same deductions as permanent employees. This is an area that end clients need to be careful in as the legislation states that blanket rulings will be seen as not taking reasonable care and therefore not valid. If hirers are found to be treating contractors as self-employed when in fact they should be employees, the penalties imposed by HMRC are significant for both the hirer and the worker. To help make this determination and ensure the correct process is followed I would recommend using the online CEST tool on the HMRC website

The IR35 roll out will also impact those who receive payments under the CIS scheme as you have to be deemed self-employed and not under SDC (Supervision, Direction or Control) in order for your payments to be processed this way. As this decision now sits with the hirer it is vital that the correct determination is made as this will significantly effect the amount of take home pay for your workers. The most important part of this is to understand that if you deem the contract and actual working conditions within the IR35 legislation then you must make tax deductions the same for both the contractor and permanent employee.

At Service Care Construction we want to help and make sure any client we work with has the tools to make the correct determination. We are already working with our current clients to help them assess the impact of IR35 on their current operations and introduce them to the tools needed to ensure they are compliant come April 2020.

By working with us, you as a client are simply adding another layer of protection and using the knowledge and experience we have accrued over 15 years of recruiting across a variety of sectors while successfully negotiating the millions of legislative changes that have happened during that time!

If your use of contract staff is a significant part of your business, working with an agency you can trust will be an important part of this process. Our priority will be to ensure a compliant approach for both our clients and contractors by being transparent at all times and working together to navigate what will no doubt be a difficult period for the construction industry and the private sector as a whole.

To any prospective clients please feel free to contact myself, Paul on 01772 208 967 and I will happily take the time to explain what is a very complicated issue as best as I can! 

We also specialise in Legal, Healthcare, Housing, Social Work, Mental Health, Probation and Criminal Justice recruitment - if you are looking for staff or looking for work please call 01772 555530 or register your interest here.

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