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When it comes to IR35 compliance, organisations invested a great deal of time and resources ahead of the 2021 private sector implementation date to ensure robust processes were put in place to manage the off-payroll working rules.
The key to remaining compliant with any HMRC-related framework is ensuring internal processes are still being followed and adherence is well documented should it need to be evidenced in the future.
The challenges of IR35 compliance
Whether you’re an organisation that hires contracted workers directly or through a recruitment supply chain, IR35 will need to be considered whenever contractors are engaged onto new assignments. For longer assignments, it’s also best practice to review the IR35 status periodically to ensure working practices and the contractor’s remit still accurately reflect the initial status determination statement. For organisations engaging a supply chain to manage off-payroll workers, compliance becomes more complex but crucial to avoid any unexpected cases of non-compliance.
Whilst off-payroll processes may have been developed or updated ahead of the private sector roll out in April 2021, it’s important that these procedures are regularly reviewed and even more crucial that hiring managers are following them consistently.
Last year HMRC started visiting businesses to check on their IR35 processes, demonstrating that IR35 compliance isn’t simply a case of sharing those processes developed for its implementation across the business and then filing them on the bookshelf.
Understanding IR35 compliance
Late last year HMRC released guidance to share the areas they would be looking for to check IR35 off-payroll working rules are being implemented correctly by businesses. Including their expectations in crucial areas such as record keeping, auditing and the issuing of status determination statements.
This document, Help to comply with the reformed off-payroll working rules, provides a blueprint for businesses to understand what HMRC is looking for when it comes to IR35 compliance. Support is split into 14 parts, with extensive information to review. It is HMRC’s intention that the guidance for compliance helps businesses to understand what best practice looks like when it comes to working within the off-payroll working rules.
Maintaining IR35 compliance
Linx, part of the NRL Group, are a specialist workforce management business who assist their clients to develop strategic plans and practical solutions to ensure they remain compliant, whilst allowing the flexibility needed in their workforce to meet industry challenges and project demands.
Put simply, they’re an independent set of eyes and ears, working with clients to support them on compliance areas such as IR35. Providing a range of services to help businesses, including recruitment supply chain auditing and internal staff training.
To help organisations understand HMRC’s viewpoint on IR35 compliance, they’ve meticulously reviewed the latest guidance and created a whitepaper: Ensuring IR35 compliance for your business
The whitepaper covers key areas such as staff training, auditing, status determinations and supply chain management. The Linx team have used their experience developing client IR35 strategies and staff training programmes, as well as their knowledge of supply chain auditing to review and highlight the crucial elements of HMRC’s latest guidance.
You can download a copy below: