Responsibility for determining IR35 status is with the End Client
moving tax liability to the Fee Payer
Are you at risk?
- Directly engaged a Contractor outside IR35?
- Engaged a Contractor through a third party without taking “reasonable care” to determine IR35 status?
If HMRC proves that the IR35 status was incorrectly determined, you carry the liability.
Which may result in fines and penalties for unpaid tax.
How to be compliant
These are the key steps to ensure you are compliant and don’t put your business at risk:
Educate your internal teams and hiring managers on the
changes to off-payroll legislation.
Evaluate your current workforce, which roles are in-scope of IR35 and your
potential risk. Remember, the Fee-Payer is liable for directly hired contractors.
Have a detailed and insurance-backed assessment to ensure minimum risk
while giving fair determinations to your contractors.
Provide Status Determination Statements to your workforce, giving them the
ability to appeal the decision if required.
Once Status Determination Statements are confirmed, you have to start migrating
contractors who are in-scope of IR35 to either PAYE or compliant Umbrella payment options.