Off-payroll working legislation was introduced to the private sector on the 6th of April 2021, meaning your clients will now take the HMRC financial risk for ensuring the limited company contractors you engage have the correct IR35 employment status.
what is off-payroll working?
The term Off-payroll working applies to your candidates that are operating via their own personal service companies while providing services to your clients. HMRC believes that often these contractors are disguised employees hiding behind the status of “self-employed”.
Currently, it is the responsibility of your candidates to determine their own employment status by assessing their contract and working practises against what is known as the IR35 intermediaries’ legislation. An ‘outside IR35’ decision means the contractor pays significantly less tax. HMRC believes that the workers often do not do the assessments correctly. HMRC thinks that nine out of ten times, the ‘outside IR35’ decisions are incorrect.
To avoid this, the government is shifting the responsibility to the hirers. This means that your end clients will be responsible for determining their employment status and passing the decision down the supply chain so the correct payment method can be arranged.
After April 2021 your clients may insist that your candidates are engaged under a PAYE solution.
Our award-winning giant umbrella is simple to use, compliant, paperless, mobile 1st and easy to join online. With umbrella premium, your candidates can also benefit from a variety of pension options, private medical insurance and faster responses within 4 working hours.
As an alternative to an umbrella solution we have giant PEO. Offering the same benefits as giant umbrella but more straightforward because your candidates are quoted their actual pay rate.
IR35 fee payer
After April 2021 if you continue to pay candidates who engage their services via a limited company PSC and are found to be inside IR35, you will be known as the fee payer. As the fee payer, you have the HMRC financial risk of not deducting PAYE if HMRC believe you should have done so (ie they believe the PSC was caught by IR35) or deducting the incorrect amount of PAYE.
At giant, we have over a decade of experience becoming the fee payer and sitting in the contract chain between agencies and PSCs for clients such as AMS, Cielo and more. As the fee payer, not only are giant responsible for the financial risk associated with IR35, but we are the first line of support to your candidates throughout their contract with giant.