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In April 2020, the legislation for Off Payroll Workers (OPW) or contractors, known as ‘IR35’, is changing for private sector organisations.
The responsibility for determining the employment status of OPW will shift to employer, meaning they could now be liable for PAYE and National Insurance Contributions on their population of contractors.
The new rules can be difficult to navigate. Your business will need to have processes in place to monitor your OPW, assess their employment status and manage the tax risk effectively.
Beyond compliance: the opportunity
IR35 presents an opportunity to address your wider resourcing strategy to find the most effective and efficient way to create value from your people.
Monitoring your employee population equips you with the confidence to make informative decisions, and automating your processes allows you and your team to focus on other value-add activities.
We can help with any or all of the following steps of addressing IR35:
Educate: Given the importance of gaining ‘buy-in’ from internal stakeholders who are involved in the engagement of contractors, we can host a facilitated workshop containing a mixture of technical guidance, discussion and group input. We provide insight from an external, objective viewpoint and challenge internal stakeholders with a focus on practical implications.
Identify: Use data analytics to draw on multiple internal and external data sources (eg accounts payable and Companies House records) to identify the population of OPW within your organisation. Obtain the ‘as-is’ position and assess the potential past, present and future risk to your business.
Assess: Given the well-publicised limitations of the HMRC ‘Check Employment Status for Tax’ toll (CEST), we have developed our own assessment tool which uses artificial intelligence to enable status assessments of your workers to be done in less time and with greater consistency.
Monitor: Our tool provides a database to store and monitor new and existing OPW population, including a risk rating flag, highlighting how often each OPW should be reassessed while they continue to be engaged.
Action: Our solution includes appropriate communication to the impacted stakeholders with details of the actions required. This includes the engaging department, individual contractor and agency where used. When an OPW is deemed to be employed, the tool provides guidance on the process for operating payroll for this population as well as outlining a dispute process.
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