Contractors’ end-clients handed IR35 reform checklist

Contractors now have an 11-point checklist to hand their clients, especially engagers among the one in three mid-sized or large outfits that still don’t know IR35 is changing from April.

Produced by WTT Consulting, the checklist outlines “things to consider and review” from the end-user having to set IR35 status -- even though 40% believe it will still be their PSCs’ duty.

Asked about the list, which emerges with only 19 weeks to go until IR35 overhauls, the tax advisory sounded sympathetic to clients still unaware of the practical changes involved.  

'Last-minute'

 “The nature of the contracting world -- I’m sure contractors and their contractual partners know -- is that everything happens at the last-minute,” says WTT’s Rhys Thomas.

“We’re expecting much the same here with private sector IR35 reform, so we are anticipating more and more clients -- and agencies, running through last-minute preparations.”

Seven questions inform the checklist-actions, which are outlined in the order to take them and include ‘review the supply chain,’ ‘decide on engagement models’ and ‘change contracts.’

'How'

The questions cover how engagers will decide contractors’ status; how they will pass on Status Determination Statements and how Status Disagreements will be addressed.

There is a section on ‘priorities’ too, relating to clients’ existing, pending and incoming contracts, ending before, after or straddling the April 6th commencement date.

“For those who haven’t already,” advises WTT, “clients will need to urgently look at how the new legislation is best integrated into the procurement of their contingent staff.

“[Doing this can] limit the risk of non-compliance. You should assemble a steering group who should consider the following [checklist actions].”

'Very little input for contractors'

Such a group is usually made up of members of the end-user’s HR and Finance team, tasked to look at how IR35 reform needs to be rolled out across the business, Mr Thomas said.

“Because the end-client is going to assess status,” he said, “and the agency then is liable for deducting the tax, the contractor actually has very little input in the process from April.”

While that may sound like a boon for PSCs, as the onus will be off their shoulders for once, WTT believes that “many” clients still “don’t have the necessary understanding of IR35.”

Some clients clearly think they do, however. At the time of writing, ContractorUK is looking into claims that a nuclear waste company and a leading telco are the latest engagers to try to remove themselves from the scope of the draft IR35 legislation by ceasing to engage PSCs altogether.

Editor's Note: See the checklist here.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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