Compliance Unpicked: How would you fare with an IR35 off payroll investigation?

11 September 2023

Andrew Webster - MD, Workwell Enterprise

Andrew Webster

MD, Workwell Enterprise

When IR35 reforms were introduced in the private sector in 2021, HMRC promised a ‘soft landing’ with regards to enforcement.

This may have bought the tax office some time to work out which organisations and sectors they were going to target and how they would approach them.

In the meantime, despite a handful of cases, mostly involving other government departments receiving hefty fines for breaching the rules, HMRC has been true to its word, with relatively little enforcement action in the wider world to date.

That said, the settling-in period was never going to last, and we can expect HMRC become more active. Indeed, it’s known that HMRC has already asked some end hirers about how their organisations have prepared for IR35 reform, exploring their processes and controls to comply with IR35.

Letters we’ve seen include requests for information about the number of contractors taken on, the payment options being used, and the actions being taken to monitor compliance among the wider labour supply chain, looking at the issue from the engagement stage onwards.

This means it’s time to look again at your systems, processes, controls and staff training to ensure you’re watertight when it comes to compliance. If your business has been on top of the issue since the reforms were proposed, you will hopefully be in a strong position. However, if your business didn’t address the issue thoroughly in the beginning, or if you haven’t put in place a method of continual review to ensure you and your supply chain is compliant and remains that way, then it’s advisable to spend some time on this before it’s too late.

One of the challenges is that things change over time, and even the most robust systems and processes can go awry. What’s important is that your organisation has IR35 compliance as ‘business as usual’ – and that it remains that way to ensure ongoing compliance.

How can we help?

Find out more about our regulatory support services and our IR35 services for recruiters. As compliance experts, we can conduct a detailed audit to look at your organisation and your labour supply chain, identify possible risks and to help you understand where you may be vulnerable.

The recommendations can be presented to key stakeholders and, if agreed, implemented independently, or we can work alongside you until your organisation is fully compliant.

Ongoing, we can provide the support you need to assure yourself that your organisation remains compliant. This removes financial and reputational risk and helps you build a competitive advantage as you can assure end hirers that by choosing to work with a compliant recruitment agency, they too are protecting themselves should the HMRC spotlight turn on them.


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