Compliance has never been so important, with IR35 putting the responsibility for the whole supply chain on the end hirer. This is not just the case for private companies but in the public sector too. Failure to carry out due diligence when hiring contingent staff could lead to liabilities.
What is end-to-end compliance?
End-to-end compliance means understanding who you’re working with throughout your entire supply chain. Recruitment partners are vital to ensuring gaps in the rota are filled, but you can’t afford to overlook their practices. You should be confident they can withstand the most rigorous investigations into their methods and be able to demonstrate compliance.
Consequences of non-compliance
The IR35 legislation was designed to cut down on tax avoidance by disguised employees and it investigates suspected non-compliance in full. Unexpected tax bills and penalties can be leveraged on public sector hirers that have not administered the rules properly.
A report from the Public Accounts Committee found government departments and committees owe HMRC £236 million for the 2020-21 tax period as a result of incorrect implementation of IR35 rules. This demonstrates the complexity of the legislation and the importance of fully understanding how to be compliant.
How to ensure compliance
There are a number of ways you can ensure you’re working with accredited partners that demonstrate both credibility and compliance. They include:
- Selecting recruiters from a list of approved suppliers for your industry. For example, the NHS has agencies that fit inside its framework, offering an extra level of protection when it comes to compliance. Demand for talent does mean it’s not always possible to recruit from these pools, however.
- Check all the relevant paperwork, such as employment contracts and certificates for VAT, insurance and incorporation. Having all of these accreditations in place should act as reassurance of compliance and aid transparency, so there should be no problem in asking to see them.
- Scrutinise how temporary staff will be paid, what deductions will be taken, how expenses are reimbursed and how holiday pay is calculated.
- Ensure there are no conflicts of interest anywhere in the supply chain that could lead to issues further down the line.
- Ask for an outline of the internal IR35 process and have it checked by specialists to make sure it’s in accordance with the rules set out by HMRC.
- Perform checks on intermediaries who are involved in the supply of temporary staff too.
IR35 health check
At +Us we’re dedicated to supporting you in your compliance needs. We are part of the Brookson Group and can therefore offer you legal support to ensure you processes are correct and to see where you could make improvements. You’ll receive a tailored report outlining any areas of risk, as well as solutions to implement and opportunities to make cost savings.